HomeMy WebLinkAbout25- Finance CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: BARBARA PACHON, Subject: AMENDMENT OF CONTRACT WITH (MRC)
• DIRECTOR OF FINANCE O D ��J MUNICIPAL RESOURCE CONSULTANTS TO
O� V INCLUDE REVENUE ENHANCEMENT AND
Dept: FINANCE AUDITING SERVICES.
Date: MARCH 11, 1996
Synopsis of Previous Council action:
APRIL 20, 1987, RESOLUTION 87-131 ADOPTED AUTHORIZING THE EXECUTION OF AN AGREEMENT
WITH MUNICIPAL RESOURCE CONSULTANTS (MRC) RELATING TO SALES TAX AUDIT SERVICES.
Recommended motion:
ADOPT RESOLUTION.
Signature
Contact person: Barbara Pachon, Director of Finance Phone: x - 5242
Supporting data attached: STAFF REPORT, MRC PROPOSAL _ Ward:
FUNDING REQUIREMENTS: Amount: N/A
Source: (Acct No. )
(Acct Description)
Finance:
Council Notes:
I
T
Agenda No. ��
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
BACKGROUND
The City is currently under contract with Municipal Resource
Consultants (MRC) for the audit of sales and use tax and the
provision of MRC's Sales Tax Analysis and Reporting Service
(STARS) . The primary purpose of MRC's services is to assure that
sales taxes are appropriately returned to the "point of sale"
community. Since the inception of the contract in April 1987
through the second quarter of 1995, MRC's efforts have resulted in
the City receiving significant sales and use tax revenue which
would not have been otherwise realized.
MRC has proposed amending their contract with the City to provide
for revenue enhancement services. MRC's revenue enhancement and
information services outlined in the analysis below are to be
provided on a self-funding basis without creating an expenditure
impact on the City's budget. The new services are self-funded by
a combination of new revenues realized by the audit services and
state reimbursements.
ANALYSIS OF PROPOSAL
MRC's proposal consists of three parts:
I. (REAP) REVENUE ENHANCEMENT AUDIT PROGRAM
The REAP service includes audit support for sales/use tax, utility
users tax, documentary transfer tax, property tax (including
redevelopment tax increment) , franchise fees, and transient
occupancy tax.
Benefit: Expansion of MRC's services to include audit support for
the taxes listed above will assist the City and the Economic
Development Agency in realizing all the revenue to which the City
is entitled to under existing law.
Funding: The benefits of the REAP program are accomplished at no
risk to the City or Economic Development Agency. MRC's services
are self-funded. They are only paid when their audit efforts
produce new revenue that would not otherwise have been realized by
the City/Agency.
II . (BLIS) BUSINESS LICENSE INFORMATION SERVICE
BLIS consists of two services 1 . ) a business inventory management
service and 2 . ) a business license administration service.
Benefit: California cities experience changes in their business
base at an average rate exceeding 20% per year due to business
openings, closings, expansions, consolidations, relocations,
acquisitions and other events. BLIS uses state of the art
technology to build and maintain a comprehensive business
inventory. This inventory is formatted and compiled according to
the requirements of the State of California Franchise Tax Board.
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BLIS also includes a business license software package to replace
the current system. The new software will increase the efficiency
and accuracy of the registration, renewal, billing, collection, and
data entry functions of the City's business license operation. The
new software operates on a user friendly PC based system and is
adaptable to existing business license forms.
Funding: Because the State Franchise Tax Board (FTB) is seeking
more complete and accurate data from cities' business license
records, the FTB will reimburse the City for MRC's cost ($110, 262)
to produce, maintain and report the City's business inventory. The
cost of the business license administration service ($15, 000
initial set up plus $2 , 000 annual maintenance) is also reimbursable
by the State. MRC's compensation is not payable until the City has
received the service and the City has received full reimbursement
from the State. In the event that the State's reimbursement to the
City is less than MRC's costs, MRC will accept the State's
reimbursement as payment in full .
III. (GRIP) GEOBASED REVENUE INFORMATION PROGRAM
GRIP includes a computerized database of all the City's land
parcels, major buildings and users (commercial , industrial,
institutional, governmental, residential) and major sources of
general revenue including franchise fees, property tax, sales/use
tax, state subventions, transient occupancy tax and utility user
tax. GRIP also includes a query system, quarterly updates of the
database, a quarterly digest and quarterly meetings to review the
results MRC's review of the data.
Benefit: GRIP is a geobased database that will greatly assist EDA
in business retention, expansion, and attraction. GRIP will also
enable the City to develop and implement strategies to preserve and
enhance the City's revenue base through applications such as:
economic development, land use planning, revenue productivity
analysis, budgeting & revenue projections, and fiscal & economic
impact analysis.
Funding: The cost of GRIP ($25, 000 for initial development plus
$1, 500 per month after initial development for updates and
maintenance) is also self-funded from new audit revenues and MRC's
"audit efficiency credits. " "Audit efficiency credits" are
efficiencies or savings that MRC realizes in performing common
tasks to provide each of the services described above. This
efficiency or savings is passed on to the City in the form of a
credit of up to $54 , 000 annually based on these efficiencies.
FISCAL IMPACT
The program is entirely self-funding. Consultant compensation is
only payable upon finding new revenues on a percentage basis for a
limited time period.
MRC's compensation for providing the Revenue Enhancement Audit
Program shall be entirely predicated and contingent upon the new
revenue realized by the audit. Under this arrangement, the City
agrees to pay MRC an amount equal to 25% of the deficiency
recoveries from eligible prior periods . When MRC's audits result
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in ongoing (rather than one-time) benefits, MRC's compensation
shall be 25% of the incremental revenue realized by the City during
the first twelve consecutive quarters following correction. No
invoice is payable until the City receives sufficient funds to
cover the charges for the program.
EQUIPMENT (HARDWARE) NEEDS
The City will need to upgrade approximately ten computer terminals
to PC's in order to utilize the software. The cost of the PC's,
cabling, printers, and other miscellaneous equipment is estimated
at $40, 000.
Funding: Funding for the hardware will come from two sources:
1. ) State reimbursement, and 2 . ) EDA contribution. The State will
reimburse the City up to $15, 000 for equipment costs associated
with the implementation of a Business License Administration
Program that meets the reporting requirements of Section 19556 of
the Revenue and Taxation Code. The Economic Development Agency will
also utilize the GRIP system and has committed $25, 000 in their FY
95-96 budget for implementation of the GRIP system. The
combination of funds from the State reimbursement and EDA
contribution will cover the cost of upgrading the required
hardware.
RECOMMENDATION
Adopt resolution authorizing execution of amended agreement with
MRC to include the provision of MRC's Business License Information
System (BLIS) , Geobased Revenue Information Program (GRIP) , and the
audit of additional revenues under the Revenue Enhancement Audit
Program (REAP) .
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1 RESOLUTION NO.
2 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
AMENDMENT OF CONTRACT WITH MUNICIPAL RESOURCE CONSULTANTS (MRC) TO
3 INCLUDE REVENUE ENHANCEMENT AND AUDITING SERVICES.
4 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
5
SECTION 1. The Mayor is hereby authorized and directed to
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amend, on behalf of said City, the agreement between the City of
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San Bernardino and MRC to include revenue enhancement and auditing
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services.
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SECTION 2 . The authorization to execute the above referenced
10 amendment is rescinded if the parties to the Agreement fail to
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execute it within sixty (60) days of the passage of this
12 Resolution.
13
I HEREBY CERTIFY that the foregoing resolution was duly
14 adopted by the Mayor and Common Council of the City of San
15
Bernardino at a meeting thereof, held on the
16
day of 1996, by the
17 following vote, to wit:
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r �
1 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
AMENDMENT OF CONTRACT WITH MUNICIPAL RESOURCE CONSULTANTS (MRC) TO
2 INCLUDE REVENUE ENHANCEMENT AND AUDITING SERVICES.
3
4 COUNCIL MEMBERS AYES NAYS ABSTAIN ABSENT
5 NEGRETE
6 CURLIN
7 ARIAS
8 OBERHELMAN
9 DEVLIN
10 ANDERSON
11 MILLER
12
13 CITY CLERK
14 The foregoing resolution is hereby approved this day
of , 1996.
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17 Tom Minor, Mayor
City of San Bernardino
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Approved as to form
19 and legal content:
20 JAMES F. PENMAN
City Attorney
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By:
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PROPOSAI/AGREEMENT TO
AMEND SCOPE OF REVENUE
ENHANCEMENT & INFORMATION SERVICES
FOR
THE CITY OF SAN BERNARDINO
March 13, 1996
by
Municipal Resource Consultants
EXECUTIVE SUMMARY
Municipal Resource Consultants (MRC) agrees to amend the scope of revenue enhancement
and information services presently provided to the City of San Bernardino (City) to include
additional sources of revenue. MRCS amended services are to be provided on an entirely
self-funded basis without creating an expenditure impact on the City's budget.
SALES TAX AUDIT & INFORMATION SERVICES
Since April 1989, MRC has provided the City with sales tax audit and information
services. As of the first quarter of 1995, MRCs sales tax audit service produced
$3,361,923 of net new revenue for the City, for a return on the City's investment of
771%.
In conjunction with the audits, each quarter MRC provides the City with a Sales Tax
Analysis and Reporting Service (STARS) which consists of a quarterly updated
onsite Query System and bound Digests. The STARS Query System includes
confidential data on all the City's sales tax generators. The STARS Digests reflect
MRC's monitoring and analysis of the City's sales tax revenue and generators, to
identify revenue performance, trends, gains, declines, projections, issues and
opportunities.
PROGRESSIVE REVENUE SERVICES
Business License Information Service (BLIS) is comprised of two individual
services: 1) a business inventory management service; and 2) an optional
business license administration service. BLIS establishes and maintains a
current, comprehensive and valid inventory of all the City's businesses. BLIS
includes: MRC's proprietary software; physical canvassing of every street and
commercial/industrial facility within the City's borders; continuous
development of the business inventory using MRC's geobased data integration
technology; increased efficiency in registration, renewal, billing, collection, data
entry and overall City business license administration; ongoing software/data
maintenance, training and support as described in Exhibit "A." MRC shall install
the software on a City computer and train staff within 60 working days of
receipt of the amended agreement approved by the City. Each month Iv1RC shall
update the City's business inventory database and provide the Franchise Tax
Board (FTB) with corrected, standardized, enhanced and properly formatted
(according to FTB requirements) business license tax information. MRC's
Business License Information Service is eligible for State reimbursement.
Revenue Enhancement Audit Program (REAP) is designed to assist the City in
realizing all of the revenue to which it is entitled, but may not be receiving, from
the following sources - business license tax, documentary transfer tax, franchise
fees, property tax (including RDA tax increment), transient occupancy tax and
utility user tax- as described in Exhibit "B." MRC's REAP service results in the
detection, documentation and correction of errors and omissions causing
deficiencies and thereby produces new revenue that would not otherwise have
been realized by the City. MRC shall commence the REAP service within 10
working days following receipt of the amended agreement.
Geobased Revenue Information Program (GRIP) includes a computerized
database of all the City's land parcels, major buildings and users (commercial,
industrial, institutional, governmental, residential), and major sources of general
revenue including, but not limited to, business license tax, franchise fees,
property tax, sales/use tax, state subventions, transient occupancy tax and utility
users tax, as described in Exhibit "C." Quarterly, MRC shall update the GRIP
database, train authorized staff in the use of the GRIP Query System, and review
with designated City personnel the GRIP Digest with regard to revenue
performance, trends, gains, declines, projections, issues and opportunities and
provide the City with hardcopy analysis of the City's revenue generators and
sources.
LEVERAGED EFFICIENCIES
MRC has developed a unique package of revenue audit and information services
that progressively build on each other to capitalize on the common tasks
accomplished, data developed and results produced. MRC calls this "leveraged
efficiencies."
MRC's Progressive Revenue Services capitalize on these leveraged efficiencies to
maximize client revenues, cost savings and return on investment MRC is thus able
to provide the City with a comprehensive package of extremely valuable, unique
services that are entirely self-funding.
SELF-FUNDING COMPENSATION
MRC has structured the BLIS, REAP and GRIP services to be entirely self-funding
for the City, as follows:
Business License Information Service (BLIS) - is entirely eligible for SB 90
reimbursement and MRC's compensation is not payable until the City has
received the service and the State has reimbursed the City for BLIS. In the event
the State does not fully reimburse the City for BLIS, the amount not reimbursed
by the State is not due to MRC until the City has received full reimbursement
from the State. The Business Inventory Management Service shall be provided for
an annual fee of$110,262, and the optional Business License Administration Service
shall be provided for a one-time fee of $15,000, and an annual maintenance fee of
$2,000 starting in the second year.
Revenue Enhancement Audit Program (REAP) -shall be provided on a self-funded
basis, whereby MRC's compensation is entirely predicated and dependent upon the
results produced for the City. MRC's compensation is 25% of the deficiency
recoveries from eligible prior periods. When MRC's service results in the detection
and correction of errors/omissions that the City and MRC mutually agree will
produce ongoing (rather than one-time) benefits to the City, MRCs compensation is
25% of the incremental revenue realized by the City during the first twelve quarters
following correction.
Geobased Revenue Information Program (GRIP) - compensation for the initial
development and implementation of the GRIP database is $25,000. The monthly
fee for the ongoing service is $1,500. MRC's compensation for providing the
initial and ongoing GRIP service is payable after the City has received the
services being invoiced and has sufficient funds to cover the charges from
accrued Audit Efficiency Credits (see below) and/or the City's share of new
revenue produced from MRC's revenue enhancement audits.
MRC Audit Efficiency Credits - Efficiencies and savings are realized by MRC
from common tasks accomplished and data developed in providing the REAP
and GRIP services. In this regard, NIRC proposes to offer to the City, in the form
of Audit Efficiency Credits, an opportunity to reduce the compensation paid
MRC by the City. These are detailed in Exhibit B, Section 5.1.
y
EXAMPLE OF SELF-FUNDING AND USE OF AUDIT EFFICIENCY CREDITS
The following illustrates a hypothetical example using new revenue generated by MRCs
audit services and state reimbursement to fund services provided during the first year of
the amended agreement.
Revenue Self-Funded
to Cost to
City City
BLIS reimbursement to City from State $125,262
Less: business inventory management service <110,262>
Less: business license administration service < 15,000>
New revenue to City from MRCs REAP services $300,000
(including sales/use tax audits)
Less: MRC compensation at 250 75,000
GRIP service charge for first full year 34,000
($25,000 initial & 6 months®$1,500)
MRC Audit Efficiency Credits <54,000>
TOTALS $300,000 $55,000
City may apply Audit Efficiency Credits to MRC's audit fees and GRIP.
TABLE OF CONTENTS
AMENDED CONSULTANT SERVICES AGREEMENT
EXHIBIT A BUSINESS LICENSE INFORMATION SERVICE
Attachment A-1 Licensing Agreement for BLIS
EXHIBIT B REVENUE ENHANCEMENT AUDIT PROGRAM
EXHIBIT C GEOBASED REVENUE INFORMATION PROGRAM
Attachment C-1 Licensing Agreement for GRIP
EXHIBIT D GENERAL PROVISIONS
AMENDED CONSULTANT SERVICES AGREEMENT
THIS AGREEMENT is made at San Bernardino, California, as of
1996, by and between the City of San Bernardino, a municipal corporation
(hereafter referred to as "City") and Municipal Resource Consultants (hereafter referred
to as"Consultant" or "MRC"), who agree as follows:
1. Services. Subject to the terms and conditions set forth in this Agreement,
Consultant shall provide to City the services described in Exhibits "A", "B", "C" and
"D" (the "Exhibits".) Consultant shall provide said services at the time, place, and in
the manner specified in the Exhibits. Consultant shall not be compensated for services
outside the scope of the Exhibits.
2. Payment. City shall pay Consultant for services rendered pursuant to this
Agreement at the times and in the manner set forth in the Exhibits. The payments
specified in the Exhibits shall be the only payments to be made to Consultant for
services rendered pursuant to this Agreement, unless the City approves additional
compensation for additional service. Consultant shall submit all billings for services
rendered pursuant to this Agreement to City in the manner specified in the Exhibits.
3. Facilities and Equipment. Consultant shall, at its sole cost and expense,
furnish all facilities and equipment which may be required for furnishing services
pursuant to this Agreement, with the exception of the computer equipment specified in
the Exhibits.
4. Exhibits. All Exhibits referred to herein are attached hereto and are by this
reference incorporated herein.
EXECUTED as of the day and year first above stated.
CITY OF SAN BERNARDINO
By:
Title:
Date:
MUNICIPAL RESOURCE CONSULTANTS
PARTNER: JOHN T. AUSTIN, INC.
By:
John T. Austin
Title: President
Date: March 13, 1996
EXHIBIT A
BUSINESS LICENSE INFORMATION SERVICE
Municipal Resource Consultants (MRC) proposes to provide to the City of San
Bernardino (City) a Business License Information Service (BLIS) that is comprised of
two individual services: 1) a business inventory management service; and 2) an
optional business license administration service. The objectives, scope, procedures,
system requirements, custom specifications, software license, timing, support and
compensation are set forth as follows:
1. BACKGROUND
In 1984 the state legislature enacted Revenue and Taxation Code Section 19556 1
requiring most California cities to furnish the state Franchise Tax Board (FTB)
specific business tax information each year. In this regard, Government Code
Section 17561 2 provides for reimbursement to cities for certain costs incurred
from state-mandated local programs; also known as SB 90 reimbursement.
The FTB utilizes the cities' business community data to monitor compliance with
the State Income Tax, and Bank and Corporation Tax. This program has proven
to be successful in allowing the FTB to increase state revenue, but it has become
apparent to the FTB that there is a strong correlation between the quality and
frequency of the data received and the amount of the revenue that could be
raised for the State. Furthermore, research has shown that cities throughout
California experience changes in their business base at an average rate exceeding
20% per year - due to business openings, closings, expansions, consolidations,
relocation, mergers, acquisitions and other events. Given this situation, a valid
listing of a city's businesses typically does not exist.
As a result, much of the data received by the FTB is not of the desired quality,
frequently in the wrong format, missing important data (e.g. SIC codes), not
standardized as to address and name, includes closed businesses not purged
from city files, missing many new businesses and it is received only once a year.
1 Revenue and Taxation Code Section 19556 requires any California city which maintains or has access
to a computerized recordkeeping system, and which assesses a business tax, to annually furnish the
Franchise Tax Board specified business tax information on all businesses subject to the tax in the
preceding fiscal year. The Government Code further specifies that access to the business tax
information is to be kept confidential and shall be disclosed only to the FTB.
2 Government Code Section 17561 provides for the State Controller's Office to reimburse cities for
certain cost incurred for state-mandated local programs. City-incurred costs that are eligible for such
reimbursement include administrative, operational and related costs which are reasonably necessary to
implement and maintain an FTB compliance program. This includes costs for staff, independent
consultants, automated and manual system modifications, data collection and reasonable allocation of
overhead expenses.
1
MRC's BLIS business inventory management service creates and maintains a
comprehensive and valid inventory of current businesses operating within the
City's boundaries. The inventory is created by combining MRC's geobased data
integration technology, which extracts relevant business data from a large
variety of data sources (including the City's existing business license records),
and physical canvassing of the City which captures those firms that elude
electronic data sources. The combined data is corrected, standardized and
enhanced (e.g. business name, address, SIC code) and formatted according to
FTB requirements. Each month the data is updated and delivered to the FTB
and the City. The business inventory provided to the City is placed on a
personal computer designated by the City and is accessible through MRC's
proprietary compliance software.
The optional BLIS business license administration service provides the City with
MRC's proprietary business license administration software. This service greatly
increases the efficiency of the registration, renewal, billing, collection, data entry
and overall administration of a city's business license operation. It is adaptable
to existing business license forms, is compatible with all standard accounting
packages and can operate through most computer systems or platforms. BLIS is
eligible for State reimbursement.
2. OBJECTIVES
MRC's BLIS is designed to assist the City achieve the following objectives:
❑ Build and Maintain an Accurate Business Inventory
❑ Produce State-Mandated Business Tax Information that Qualifies for State
Reimbursement
❑ Increase License Registration and Renewal Efficiency (optional service)
❑ Reduce Data Entry Errors, Processing Time and Costs (optional service)
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3. SCOPE OF SERVICE
MRC shall provide the City with a Business License Information Service which
includes:
❑ Creation and maintenance of a comprehensive and valid inventory of the
City's businesses that is continuously updated
❑ Monthly progress reports to the City on the status of the business
inventory which shall include the current business inventory
❑ Production of business inventory data on appropriate media and in
appropriate format provided to meet the mandate reporting deadline of
March 31 each year
❑ License to use MRC's proprietary business inventory management
software
• License to use MRC's proprietary business license administration software
• Ongoing software upgrades, training and support
❑ Assistance with Franchise Tax Board (FTB) reporting and SB 90
reimbursement claims
4. PROCEDURES
MRC responsibili ties:
❑ Review the City's business license tax ordinance for enforceability,
coverage, billing and collection efficiency
❑ Review the City's business license forms for opportunities to simplify
taxpayer reporting, capture economic development data (number of
employees, building space, etc.) and FTB-mandated information, and
increase processing efficiency
❑ Secure from the City on electronic media a current listing of all businesses
registered with the City, and convert the data to a BLIS-readable format
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• Develop and maintain a computerized inventory of businesses operating
in the City by:
o Physically canvassing every street and commercial/industrial
facility within the City's borders
o Preparing an aggregated list of business entities on electronic
media; this list is derived from multiple private and public hard
copy and electronic sources, including specialized business listings
and directories, and the City's business tax and other confidential
revenue payment files
o Cleaning and standardizing, in address-order, each entity's
business name, address, and payment file information to eliminate
redundancies
• Provide monthly data cleaning, standardization and multiple source
integration using MRC's proprietary software for compliance and
enforcement
❑ Install the BLIS software, provide ongoing software upgrades, training
and support
❑ Assist City and/or the City's consultant in preparing the claim for state
reimbursement by providing the substantiating documentation and
rationale to support the SB 90 claim and represent same with the FTB and
the State Controller's Office
City staff responsibilities:
❑ Establish a record for each registered business to include FTB-mandated
information;
❑ Each month provide MRC with a current listing of all businesses
registered with the City on electronic media;
❑ Submit to the appropriate State agency an estimated claim for BLIS
reimbursement by the deadline for submitting estimated claims for
compliance with State mandates each year (November 30 of the fiscal year
in which the expense is incurred, or other deadline as may be established
by the State); and
❑ Submit to the appropriate State agency a claim for actual expenses
incurred for BLIS by the deadline for submitting claims for
reimbursement of State mandated local programs (November 30
following the fiscal year in which the expense is incurred, or other
deadline as may be established by the State).
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5. SYSTEM REQUIREMENTS
o Any 486 based IBM or compatible PC with 16 MB RAM
o Hard disk with a minimum free space of 250 MB (May vary
depending)
0 3.5" floppy disk (1.44 MB)
0 14" SVGA monitor, 15" or 17" recommended
o Parallel (Centronics compatible) printer interface
o Any Centronics-compatible parallel printer
o Modem (min. 14.4 baud rate 28.8 preferred) and dedicated
telephone line
o Double speed CD Rom, Quad speed preferred
o Mouse
Software required includes:
o MS or PC DOS version 5.0 or later
o Communications software for the modem
o Word processing software with mail merge capability, i.e.,
WordPerfect, Microsoft Word, etc. for optional business license
administration service
Should the City desire, MRC will assist in evaluating and procuring the necessary
hardware and/or software.
6. CUSTOM SPECIFICATIONS
The BLIS business license administration software can be customized to fit the City's
specific needs. The basic software includes the required state-mandated fields, state
tax report and standard revenue reports. Additional fields, reports and other
detailed specifications can be added on a pre-quoted time and materials basis.
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7. SOFTWARE LICENSE,TIMING AND SUPPORT
BLIS includes the attached software license and maintenance agreement (see
Attachment A-1).
Within 60 working days of contract authorization, MRC shall:
0 Install BLIS software on City hardware
0 Provide staff with up to 16 hours of training with easy-to-use operating
manuals
MRC shall also provide ongoing software and documentation upgrades, data
updates, and up to 12 hours of annual support onsite or remotely by telephone
and/or modem on an as-needed basis.
8. COMPENSATION
Pursuant to Government Code Section 17561, MRC's fees for BLIS are eligible for
reimbursement by the State. To make BLIS entirely self-funding for the City,
MRC's compensation is payable only after MRC has installed the BLIS software
on City computer system, has trained City personnel on the use of the software,
has produced the business license inventory in the appropriate format and on
appropriate media and delivered same to the FTB to meet the State reporting
mandate, and the City has been paid on its estimated claim for State
reimbursement for BLIS. MRC's fee for BLIS is due within ten days thereafter.
In the event the State does not fully reimburse the City for BLIS, the amount not
reimbursed is not due MRC until the State has reimbursed it to the City.
The annual Business Inventory Management Service is provided for a fee of
$110,262, and the optional Business License Administration Service shall be
provided for a one-time fee of $15,000, and an annual maintenance fee of $2,000
starting in the second year.
MRC shall assist the City and/or the City's consultant in preparing the necessary
claim for state reimbursement by providing the substantiating documentation,
rationale, and cost breakdown to support the SB 90 claim and represent same
with the FTB and the State Controller's Office.
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%Y.
9. AUTHORIZATION
The City of San Bernardino hereby authorizes MRC to provide the following
BLIS service(s):
Business Inventory Management Service
Business License Administration Service (Optional) ❑ Authorized
❑ Not Authorized
EXECUTED as of this day
CITY OF SAN BERNARDINO MUNICIPAL RESOURCE CONSULTANTS
PARTNER: JOHN T. AUSTIN, INC.
BY: By
Title: Titl . President
Date: Date: March 13 1996
7
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Attachment A-1.
LICENSING AGREEMENT
for
BUSINESS LICENSE INFORMATION SERVICE (BLIS)
This Agreement is made at San Bernardino, California, as of 1996, by and
between the City of San Bernardino, a municipal corporation (hereafter referred to as
"City") and Municipal Resource Consultants (hereafter referred to as "MRC"), who
agree as follows:
1. License. Subject to the terms and conditions set forth in this Agreement; MRC
shall provide to the City a license to use MRCs software, database, and other
property (hereafter referred to as "Property") as further described in
Exhibit"A". MRC shall provide said Property at the tune, place, and in the
manner specified in Exhibit "A". MRC shall not be compensated for property
outside the scope of Exhibit"A"-
2. Restrictions. Said Property shall only be used by the City. The City shall not
sublet, duplicate, or modify said Property. Said Property may only be used for
the purposes described in Exhibit "A". Said Property shall be returned to MRC
at the time the license expires. MRC may terminate the license, at its sole option,
if City violates any of the stated restrictions. The Property remains the sole and
exclusive property of MRC.
The license granted hereunder shall not imply ownership by City of said
Property, rights of City to sell said Property, or rights to use said Property for
Elie benefits of others. This license is transferable only with MRC's written
consent.
3. Payment. City shall pay MRC for license rendered pursuant to tbis Agreement
at the times and in the manner set forth in Exhibit"A". The payments specified
in Exhibit A shall be the only payments to be made to MRC for license
rendered pursuant to tiuis agreement, unless the City approves additional
conilwnsation for additional property. MRC shall submit all billings for license
reiulererh pursuant to this At;reenlent to City in the manner specified in
Exhibit"A"
S
4. Attachments and Exhibits. All Attachments and Exhibits referred to herein are
appended hereto and are by this reference incorporated herein.
5. Proprietary Information. As used herein, the term "proprietary information"
means any information which relates to internal controls, computer, or data
processing programs; data that has been modified by MRC proprietary
techniques resulting in standardized, specifically correlated, or integrated
information; electronic data processing applications, routines, subroutines,
techniques, or systems; or business affairs and methods of operation or
proposed methods of operation of MRC, except such information which is not
obtained through this Agreement or which is in the public domain at the time of
its disclosure to the other party. City shall hold in confidence using levels of
effort consistent with its own policies applicable to its confidential information
and shall not disclose to any other party any MRC proprietary information (as
such terms is herein defined) which may be disclosed to City by MRC in
connection with this Agreement or otherwise learned or obtained by City in
connection with this Agreement The parties further agree not to take any other
action inconsistent with the confidential nature of MIZC proprietary information.
The obligations imposed by this Paragraph shall survive any expiration or
termination of this Agreement This section shall not apply to any information
which is public information.
6. Waiver. No waiver of any breach or failure or delay in exercising any right;
power, or remedy shall constitute a waiver of same or of any provision hereof
and no waiver shall be effective unless in writing and signed by an authorized
representative of the party against whom enforcement of such waiver is sought.
7. Severability. The provisions of this Agreement are severable, and the
unenforceability of any provision of this Agreement shall not affect the
enforceability of this Agreement or any other provision hereof. In addition, in
the event that any provision of this Agreement is determined by a court to be
unenforceable as drafted, the parties acknowledge that it is their intention that
such provision be construed in a manner designed to effectuate the purposes of
such provision to the fullest extent enforceable under applicable law.
8. Taxes. City shall be responsible for the payment of any applicable taxes in
connection with the Agreement, except for atly tax based on NfRC's net income_
9. Govern'ng Law. This Ylgreouient shall be governed by, and construed in
accordance with, the laws of the SUItc of California.
u M.
10. Remedies Cumulative. All remedies in this Agreement are cumulative and in
addition to and not in lieu of, any other remedies a party may have at law or in
equity.
11. Entire Agreement. This Agreement and the Exhibits hereto, which is hereby
incorporated herein by reference, shall constitute the entire agreement between
City and MRC with respect to its subject matter, shall supersede all prior
agreements and understandings, if any, between the parties respecting the
subject matter hereof and may be modified only by written agreement of the
parties.
EXECUTED as of the day and year first above stated.
CITY OF SAN BERNARDINO
By:
Title:
Date:
MUNICIPAL RESOURCE CONSULTANTS
PARTNER: JOHN T. AUSTIN, INC.
By: -
John T. Austin
Title: President
Date: March 13, 1996
10
EXHIBIT B
REVENUE ENHANCEMENT AUDIT PROGRAM
Municipal Resource Consultants (MRC) presently provides to the City of San
Bernardino (City) a Revenue Enhancement Audit Program (REAP) to assist the City in
realizing all of the revenue to which it is entitled from sales/use tax, and agrees to
amend the scope to include business license tax, documentary transfer tax, franchise
fees, property tax (including RDA tax increment), transient occupancy tax and utility
users tax. The purpose, scope, procedures, timing, reports and compensation are set
forth as follows:
1. BACKGROUND
Many California cities are not realizing all of the revenue to which they are
entitled from existing tax sources due to administrative errors and omissions by
businesses and third-party intermediaries (such as the state, counties, and utility
companies) responsible for collecting the revenue and remitting it to the cities.
Administrative errors and omissions are inevitable given the non-standard,
complex nature of state and local taxes with regard to applicability, rates,
exceptions, exemptions, quirks and inconsistencies. Rapidly changing
technology, deregulation, human fallibility, fragmented responsibilities and
employee turnover further compound the problem.
Because there are time limitations on a government agency's ability to recover
revenue to which it has been deprived, it behooves the City to have revenue
enhancement audits conducted as thoroughly and rapidly as possible.
2. PURPOSE & SCOPE
The purpose of MRC's revenue enhancement audits is to assist the City in
recovering all of the revenue to which it is entitled from the following sources:
❑ Business License Tax
❑ Documentary Transfer Tax
❑ Franchise Fees
❑ Property Tax (including RDA tax increment)
❑ Transient Occupancy Tax
❑ Utility Users Tax
MRC's Revenue Enhancement Audit Program results in the detection,
documentation and correction of errors and omissions causing deficiencies and
thereby produces new revenue that would not otherwise have been realized by
the City.
1
3. PROCEDURES
In providing the revenue enhancement audit service, MRC shall:
❑ Meet with City's designated staff to review service objectives, scope,
workplan schedule, public relations and logistical matters; MRC will also
establish an appropriate liaison with the City's coordinator and logical
checkpoints for reviewing progress
Note: With the exception of this initial meeting, MRC's revenue
enhancement audit service requires minimal time and effort on the part of
City staff
❑ Review applicable provisions of the City's municipal code and ordinances
adopted by the City
❑ Represent the City for purposes of examining records pertaining to the
revenue sources listed above (see Section 2) to identify and confirm any
errors/omissions that are resulting in deficient payment to the City
❑ For each error/omission identified and confirmed, prepare
documentation to substantiate and facilitate recovery of revenue due from
prior periods (plus applicable interest and penalties)
• Prepare and forward to the appropriate parties "date of knowledge'
requests for corrective action and revenue recovery
• Meet with designated City official(s) as necessary to review our findings
and recommendations
❑ Provide additional assistance as necessary to support the City in
recovering and preventing tax deficiencies
MRC's detailed procedures for auditing each revenue source shall be provided
on request.
2
4. TIMING & REPORTS
MRC shall commence the revenue enhancement audits within 10 working days
of authorization with the objective of delivering the initial audit reports within
90 to 120 working days after receiving the necessary data. Thereafter, MRC shall
provide the City with audit progress reports to include, but not be limited to, the
following:
❑ Status of work in progress, including copies of reports provided to
taxpayers/intermediaries addressing each reporting error/omission
individually, including where applicable the business name, address,
telephone number, account identification number, individuals contacted,
date(s) of contact, nature of business, reason(s) for error/omission and
recommended corrective procedure
❑ Actual revenue produced for the City by MRC's service on a quarterly
and cumulative basis
❑ Projected revenue forthcoming to the City as a result of MRC's audit
service, specified according to source, timing and one-time versus
ongoing
❑ Alphabetical listing of all errors/omissions detected for the City by MRC
including, for each, the account number, correction status, payment
amount received by the City, period to which payment is related and
payment type (e.g., reallocation, deficiency assessment, etc.)
3
i.
5. COMPENSATION & EXPENSES
To make MRC's service self-funding for the City and its Redevelopment Agency
(Agency), MRC's compensation for providing the Revenue Enhancement Audit
Program (REAP) shall be entirely predicated and contingent upon the audit(s)
producing new revenue that would not otherwise have been realized by the
City/Agency.
Under this arrangement, the City/Agency agree(s) to pay MRC an amount equal
to 25% of the deficiency recoveries from eligible prior periods (plus associated
charges for penalties and interest). Said recoveries include amounts recovered,
refunded, credited, or any other consideration received by the City/Agency in
lieu or as a result of the audit findings. When MRC's audits result in the
detection and correction of errors/omissions that the City/Agency and MRC
mutually agree will produce ongoing (rather than one-time) benefits, MRC's
compensation shall be 25% of the incremental revenue realized by the
City/Agency during the first twelve consecutive quarters following correction.
In this regard, the City/Agency agree(s) to:
o Invoice the responsible party for tax deficiencies (plus associated charges
for penalties and interest) identified and confirmed by MRC within 30
days following receipt of MRC's report; and
o Notify MRC within 10 days following receipt by the City/Agency of
payments (cash payments, installment payments, or other compensation
directly benefiting the City/Agency) resulting from MRC's audit service.
Upon being notified of receipt of payment(s), MRC will then invoice the
City/Agency. Earned compensation is due and payable upon receipt of
invoices.
All expenses incurred by MRC in providing the revenue enhancement audits
and information services are absorbed by MRC. These expenses include items
such as employee salaries and benefits, insurance, airfare, auto rentals, meals,
lodging, keypunching, computer processing, clerical meetings, telephone, mail,
etc.) photocopying, overhead and miscellaneous out-of-pockets for consumable
supplies and research materials such as maps, directories, etc.
4
5.1 MRC AUDIT EFFICIENCY CREDITS
Efficiencies are realized by MRC from common tasks accomplished and data
developed in providing multiple revenue audit services and GRIP. In this
regard, MRC proposes to offer to the City, in the form of Audit Efficiency
Credits, an opportunity to reduce the compensation paid MRC as follows:
First Tier Audit Efficiency Credits - the City can qualify for First Tier
Audit Efficiency Credits if, in addition to BLIS, the City elects to utilize
MRC's REAP and GRIP services. This will provide a credit of $54,000,
which may be used to reduce MRC earned compensation from REAP
and/or GRIP services for the period described below each year
commencing July 1, 1996.
Second Tier Efficiency Credits - the City can qualify for Second Tier
Audit Efficiency Credits if, in addition to BLIS, the City elects to utilize
MRC's REAP service (but not GRIP). This will provide a credit of$27,000,
which may be used to reduce MRC earned compensation from the REAP
service for the period described below each year commencing July 1,
1996.
In addition, to qualify for Audit Efficiency Credits, the City must:
❑ Authorize MRC to proceed with the appropriate services for the Tier of Audit
Efficiency Credits sought;
❑ Submit to the appropriate State agency an estimated claim for BLIS
reimbursement by the deadline for submitting estimated claims for
compliance with State mandates each year (November 30 of the fiscal year in
which the expense is incurred, or other deadline as may be established by the
State); and
❑ Submit to the appropriate State agency a claim for actual expenses incurred
for BLIS by the deadline for submitting claims for reimbursement of State
mandated local programs (November 30 following the fiscal year in which
the expense is incurred, or other deadline as may be established by the State).
Audit Efficiency Credits are granted July 1 of each year and are applied to MRC
billings between that July 1 and the following June 30 to reduce the amount due
MRC as earned compensation for providing REAP and/or GRIP services. Audit
Efficiency Credits may not be carried over beyond June 30 of any year.
As stated above, IVIRC's revenue audit and information services are being
provided as a package. Should the City elect to terminate any of the services
provided by MRC, or should there be a fundamental change in the funding or
administration of any of the revenue sources subject to MRC services, or should
the State cease to mandate and/or fund the city business license reporting
program, the Compensation and Audit Efficiency Credits sections of the package
agreement would be subject to modification by mutual agreement of the City
and MRC.
5
c2,3 .
6. BACKSTOP AUDIT PROGRAMS
MRC's revenue enhancement and information services described in this and the
following exhibit are to be provided on a self-funding basis without creating an
expenditure impact on the City's budget.
Accordingly, if the City has an additional ("backstop") revenue enhancement
audit g
P ro ram (staffed by internal or external personnel), it is understood and
agreed that those personnel must detect and document in writing (on behalf of
the City) to the taxpayer and/or responsible intermediary (e.g., state, utility
company, etc.) each individual error/omission at least one full calendar quarter
prior to MRC doing so. Otherwise, MRC shall be entitled to receive
compensation for detecting and documenting any such error/omission which
has resulted in deficient payment to the City. For this purpose, the City and
MRC shall provide copies to each other of notices submitted to taxpayers and/or
intermediaries (state agencies, county, utility service providers, etc.).
6
EXHIBIT C
GEOBASED REVENUE INFORMATION PROGRAM
Municipal Resource Consultants (MRC) hereby agrees to provide to the City of San
Bernardino (City) a Geobased Revenue Information Program (GRIP). The purpose,
scope, procedures, timing, deliverables, compensation and licensing agreement
(attached) are set forth as follows:
1. BACKGROUND
1.1 THE NEW REALITY: SELF-RELIANT CITIES
The 1990s ushered in a new reality for every city in California: fiscal self-
reliance. Faced with permanent cutbacks in federal and state assistance, each
city is dependent upon the revenue generated from its own economic base to
define the level of services it can afford to provide.
1.2 CITY SERVICE FUNDING EQUATION
To sort out and better understand the strategic significance and ramifications of
self-reliance for California cities, MRC has developed what we call the "City
Service Funding Equation' to express the fundamental elements of this new
reality, as follows:
Economic Base X Revenue Structure = City Service Funding Capacity
MRC's City Service Funding Equation simply says that a city's service funding
capacity is determined by - and the product of - its revenue structure applied
across its economic base.
Economic Base - Includes land, buildings and the users thereof (commercial,
industrial, institutional, residential, governmental) that are located in the City.
Revenue Structure - Consists of:
❑ Non-Discretionary Taxes - Those revenue sources that a city does not
have the authority to directly control, such as:
o Property Tax
o Sales/Use Tax
o State Subventions
❑ Discretionary Taxes - Those revenue sources that a city does have the
authority to directly control, such as:
o Business License Tax
o Transient Occupancy Tax
o Franchise Fees
o Utility Users Tax
1
1.3 THE ONLY CONSTANT: CHANGE
Given this new reality, each city needs to have a better understanding of its
economic base and revenue structure. This is a formidable challenge in that the
economic base and revenue structure are dynamic - not static - due to:
❑ Changing Business Base - Cities experience changes in their business
base at an average rate exceeding 20% per year - due to business
openings, closings, expansions, consolidations, relocations, mergers,
acquisitions and other events.
❑ Changing and Outmoded Revenue Structure - Application of a city's
revenue structure to its economic base is constantly subject to change from
legal decisions, legislation, regulation, deregulation and emerging
technology, especially in the area of telecommunications.
2. PURPOSE &APPLICATIONS
MRC shall develop and maintain a database to monitor and analyze revenue
generated from the City's economic base and revenue structure and input the
data elements into GRIP - MRC's Geobased Revenue Information Program.
GRIP facilitates the reorganization, monitoring and analysis of revenue
contribution on a total amount, segregated and aggregated basis according to
revenue source, business type, industry, business, land use, facility,
development and designated geographic area.
GRIP is a leading edge analytical and management tool which will enable MRC
to assist San Bernardino develop and implement strategies to preserve and
enhance the City's revenue base (and therefore service funding capacity)
through applications such as:
❑ Economic Development
o Business Retention
o Business Attraction
• Business Expansion
• Business Cooperation
❑ Land Use Planning
❑ Revenue Productivity Analysis'
❑ Budgeting & Revenue Projections
❑ Business License Strategic Analysis
❑ Fiscal & Economic Impact Analysis*
❑ Benefit Assessment Districts
MRC recommends that elements of physical presence (e.g., number of employees, land area/building
space, etc.) be included in the GRIP database to maximize the value of these applications to the City.
2
a4.
3. SCOPE
Sections 3, 4, 5 and 6 describe the scope, procedures, timing and deliverables for
the Core GRIP Services. Optional GRIP Services are described under Section 7.
I
GRIP provides the City with standardized, integrated and quarterly-updated
data on all key revenue sources and revenue generators in one database.
Specifically, the GRIP database shall encompass:
❑ The land parcels, major buildings, and users (commercial, industrial,
institutional, governmental, residential) located within the City's
boundaries; and
❑ The City's major sources of general fund revenue including, but not
limited to, the following:
o Business License Tax
o Franchise Fees
o Property Tax
o Sales/Use Tax
o State Subventions
• Transient Occupancy Tax
• Utility Users Tax
MRC defines a revenue generator as any entity that has a physical presence
within the City. Such an entity may either occupy or own a parcel within the
City, or be conducting business that generates revenue to the City. The GRIP
database has at least one record for each revenue generator.
As an option, the GRIP database can be expanded to include physical presence
information (number of employees, land/building size) for the City's Core
Revenue Generators. A Core Revenue Generator is defined as being one of the
City's most significant entities in terms of revenue generation. A city typically
has up to 150 Core Revenue Generators.
GRIP is a relational database, designed for extraction of information by
structuring appropriate queries. Imbedded in the database is geographic
locational information that allow queries to be address-specific, address range-
specific or parcel-specific. Should the City already possess an operational GIS
system, GRIP will be customized to link with the existing system's parcel index.
MRC's multi-disciplined staff also designs digitized mapping systems for cities.
(See Section 7.0 Optional Services - Electronic Mapping.)
3
4. PROCEDURES
In providing the Core GRIP Services, MRC shall:
❑ Meet with City's designated staff to review service objectives, scope,
procedures, workplan schedule, public relations and logistical matters;
MRC will also establish an appropriate liaison with the City's coordinator
and define logical checkpoints for reviewing progress
❑ Review applicable provisions of the City's municipal code and ordinances
adopted by the City
❑ Study City-provided data such as current yea's budget, financial
statements, general plan, aerial photos, maps, special reports and studies
(economic, market, feasibility, fiscal, etc.) that provide relevant
background or insight
❑ Inventory the land parcels and commercial, industrial, institutional,
governmental and residential (other than single family) revenue
generators located within the City's boundaries
❑ For each residential revenue generator, ascertain address and/or assessor
parcel number, revenue source and amount received by the City during
the most current year available (to be compiled for future years)
❑ For each business, ascertain name, address, assessor parcel number,
business category, revenue source, and City's portion of revenue
generated (to be compiled for future years)
❑ Electronically integrate all applicable revenue sources by business for
each address location by matching name to address and "sanitizing' all
data to assure its accuracy
• Update the data accuracy, completeness and integration each quarter as a
byproduct of our ongoing Revenue Enhancement Audit Program
• Arrange revenue receipts on a modified accrual basis for each period
• Assign each revenue generator a business category number
❑ Maintain, update and integrate the database for the duration of the
contract
❑ Prepare and install initial and quarterly-updated GRIP Query System for
onsite access by authorized City staff in formats that provide for
confidential and non-confidential outputs
4
• In conjunction with the initial installation, MRC will conduct a one-day
session to train authorized City staff in the use of the GRIP Query System
and an easy- to-follow user manual, also furnished by MRC
• In conjunction with the quarterly updates, MRC will conduct a 1-to-2-
hour session to train authorized staff in the use of the GRIP Query System
and user manual
❑ Using standard GRIP Query System menu output, format data to be
compatible with City's GIS to link through assessor parcel numbers
❑ Prepare and personally present to the City initial and quarterly-updated
GRIP Digests, which reflect MRC's monitoring and analysis of the City's
revenue, and revenue generators, to identify revenue performance,
trends, gains, declines, projections, issues, opportunities and options
5. CITY SUPPORT
The City agrees to support MRC by providing or arranging to provide (to the
best of its ability) the following:
• Letters of introduction (as required)
• Requests for information (as required) from third parties (such as the
state, county, utility companies, etc.)
❑ Codes/ordinances covering each tax imposed by the City
❑ Current year's budget report
❑ Revenue receipt information for City-imposed taxes and state subventions
❑ Special reports and studies such as general plan (and proposed
amendments), economic, market, feasibility, etc. that would provide
additional background or insight
❑ Maps (and related information) that would provide additional
background or insight, such as:
o Engineering and zoning maps of City (100' or 200' per inch scale)
o Zoning maps with street delineations
o Copy of Assessor's book/page maps for entire City
o Tax Rate Area (TRA) maps (and list of City and RDA TRAs)
o RDA project boundary maps
o Most recent aerial photograph(s) of entire city
5
O Computer equipment and related software
Hardware
0 486/33, 486/50 or 486/66 PC System
0 17' SVGA monitor
o VESA LB video SVGA(not an ORCHID, preferably GENOA)
0 16 MEG RAM
0 500 MEG internal IDE drive
0 4X CD ROM drive
o Mouse (serial port)
o Mouse pad
o Modem (min. 14.4 baud rate 28.8 preferred) and dedicated
telephone line
o HP compatible Printer (e.g. Brother HL630-645, Epson Actionlaser,
HP 2 series) with 2 MEGs of memory
o Print Drivers for the above selected printer
o FONTS (required for GRIP applications)
Font Size
Arial 8, 10, 11, 12, 14, 24
Courier 10, 12
Courier New 10
MS Sans Serif 8, 10, 12, 14, 15, 24
Small Fonts 8
Terminal 9, 14
Software:
o QEMM 7.03
o Windows for Workgroups 3.11
o DOS 6.2
Should the City so desire, MRC will assist the City in evaluating and procuring
the necessary computer equipment.
6
6. TIMING & DELIVERABLES
MRC shall commence providing the Core GRIP Services within 10 working days
following contract authorization (including the GRIP licensing agreement) with
the objective of meeting with the City within 90 working days, and each quarter
thereafter, to:
❑ Deliver and install the initial and quarterly-updated GRIP Query System
❑ Train authorized City staff in the use of the GRIP Query System (an easy-
to-follow user manual is also furnished by MRC)
❑ Review and discuss the initial and quarterly-updated GRIP Digests
The preliminary workplan schedule on the following page presents MRC's time
frames for accomplishment of the prescribed tasks. The GRIP Query System and
Digest are further described in Sections 6.1 and 6.2.
6.1 GRIP QUERY SYSTEM
Within 90 days after commencing the project, and each quarter thereafter, MRC
shall deliver and install the initial and quarterly-updated GRIP database on a
City-designated IBM compatible PC to allow onsite access by authorized City
staff. Should the City so desire, MRC shall furnish the necessary equipment and
peripherals at MRC's cost.
The GRIP Query System includes data for each of the City's major sources of
general fund revenue as follows:
❑ All revenue information is integrated according to revenue generator
name and geographic location
❑ Revenue contributions for individual and aggregate sources of revenue
are displayed for each revenue generator
❑ Combined revenue information for multiple revenue generators is
presented in user-defined geographic areas
Since the GRIP database contains information that is deemed confidential by
businesses, state agencies and the major utility companies, the GRIP data is
encrypted and the System is password-protected to ensure access by authorized
personnel only. (See Attachment C-1 for GRIP software licensing agreement.)
7
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In addition to providing training for authorized staff, MRC will also provide
technical support free of charge via telephone on an as-needed basis for up to 10
hours per quarter.
After the initial delivery and installation of the GRIP Query System, MRC shall
maintain, update and integrate the database on a quarterly basis for the duration
of the contract. The accuracy and completeness of the GRIP database will
continually improve as a byproduct of MRC's ongoing Revenue Enhancement
Audit Program.
The updates shall include revenue generator, address and/or parcel number,
business category code, business identification number, historical payments and
the most current revenue data available.
MRC's GRIP Query System will enable City staff to analyze the contribution of
revenue (from individual or aggregated sources) by each revenue generator in
the City, on an individual, grouped or sorted order by business name, business
type, business identification number, size ranking, street address, assessor parcel
number, or specific user-defined geographic areas.
The GRIP Query System can also be used to geo-code additional user-defined
areas such as City Council Districts, business industrial parks, redevelopment
project areas, etc.
The GRIP Query System provides the City with a leading-edge analytical and
management information tool for a broad range of fiscal, economic and strategic
applications.
9
t3
6.2 GRIP DIGEST
Upon delivery of the GRIP database , and each quarter thereafter, MRC shall
prepare and deliver to the City initial and quarterly-updated confidential and
non-confidential versions of the GRIP Digest.
Each issue of the GRIP Digest reflects MRC's monitoring and analysis of the
City's continually changing economic base and revenue structure, and
subsequent identification of revenue performance, trends, gains, declines,
projections, issues and opportunities.
MRC's GRIP Digest will enable the City to answer questions such as:
❑ How is the City's economic base performing in terms of revenue
generation?
❑ What changes are occurring in the City's economic base and how will
those changes impact the City's revenue?
❑ Where is the City's tax revenue coming from?
❑ What trends, good or bad, are occurring to the City's general fund
revenue base?
❑ Which businesses is the City most dependent on for its tax revenue?
❑ Which business types are the most economically desirable/undesirable?
❑ How are specific geographic areas (mutually defined by City/MRC)
performing?
❑ How will actual/potential changes to the City's revenue structure (legal
decisions, legislation, regulation, deregulation, technological change, etc.)
impact the City's revenue?
The scope of each GRIP Digest shall include, but not be limited, to:
❑ Monitoring and analyzing the City's revenue, and most significant
revenue generators, based on the following:
o Management Summary & Charts - GRIP Digest includes a
confidential and non-confidential Management Summary with
supporting color charts that graphically portray revenue
composition and performance for the City.
o Analysis Section - The Analysis Section of MRC's GRIP Digest
compares the revenue performance of the most significant revenue
generators for the latest complete quarter benchmark year to the
same period in the prior year(s).
10
The Analysis Section includes the following: (1) historical
performance to be compiled for up to four years; (2) an analysis of
the changes that occurred by business sector; and (3) an analysis by
magnitude of change indicating which key businesses grew or
declined, measured in absolute dollars and percentages.
Note: Historical data will be shown as it is compiled in preparing
future GRIP Digests. For example, the initial year will show no
historical data, and the second year will show one year's history
together with the current year.
o General Fund Trend Report. Data is summarized by type of
revenue in summary form in order to develop revenue trends
which are shown using successive benchmark years. Percentage of
revenue contributed is also shown by successive benchmark year to
indicate trends in revenue composition as well.
o Top 100 Revenue Generators - Revenue generated by the City's top
100 Revenue Generators is shown in order of aggregate revenue,
including historical performance.
o Top 20 Revenue Generators by Revenue Source - This report shows
the 20 largest revenue generators within each revenue source.
11
7. OPTIONAL GRIP SERVICES
The scope of MRC's GRIP Services can be customized to fit the City's specific
needs by adding to the Core GRIP Services one or more of the Optional GRIP
Services briefly described below. The Optional GRIP Services can be added to
the Core GRIP Services from the outset or at any time during the term of the
contract.
❑ FOCUSED ECONOMIC DEVELOPMENT STRATEGIES
By analyzing City-specific information derived from the GRIP database,
MRC can assist the City in developing and implementing focused
strategies for business retention, attraction, expansion, and cooperation.
❑ PHYSICAL PRESENCE, FISCAL IMPACT& REVENUE PRODUCTIVITY ANALYSIS
By capturing and relating elements of Physical Presence to revenue
contribution, in size-adjusted equivalent units of measurement, MRC is
able to analyze the relative fiscal impact and revenue productivity for
each revenue generator in the City.
The need for this information becomes increasingly critical as each city
moves towards fiscal self-reliance and dependence on the revenue
generated from its own economic base to fund the City's general services.
Physical presence data (such as number of employees, land/building size,
etc.) can be gathered by the City and/or MRC.
❑ BUSINESS LICENSE STRATEGIC ANALYSIS
Each city is becoming increasingly dependent on its own economic base
and discretionary (city-imposed) taxes to fund general services. In doing
so, business license tax is emerging as a key element in balancing a city's
ability to fund general services and still be competitive with other cities in
retaining and attracting businesses. MRC's analysis of the existing
business license tax ordinance (and potential revisions thereof) will assist
the City in defining the strategic role of the ordinance in shaping the fiscal
and economic future of the City.
❑ FISCAL, ECONOMIC& TAX MODELING
The GRIP database and computerized modeling capability enable MRC to
simulate the fiscal and economic impacts that various land uses,
developments, businesses and tax structures have on the City's residents,
businesses and the City itself. With this modeling capability, MRC can
rapidly simulate and analyze the impacts under numerous "what if"
scenarios based on criteria such as fairness, equity, self-reliance and
competitiveness with other cities.
-12
347
❑ STRATEGIES WORKSESSIONS& OTHER MEETINGS
By analyzing City-specific information derived from the GRIP database,
MRC can assist the City by conducting interactive worksessions to
facilitate strategic decision-making based on:
o Interrelatedness of City's economic base & revenue structure
o Identification & analysis of City's fiscal and economic SWOTS'
o Exploration, development & prioritization of feasible strategies to
improve the City's fiscal and economic stability
o Consensus building
In addition to facilitating strategies worksessions, MRC is also available to
assist the City on an as-needed basis by participating in presentations,
public hearings or other types of meetings with members of City staff or
Council, the Chamber of Commerce, media, citizen advisory groups,
committees, etc.
❑ ELECTRONIC MAPPING
Ironically, the most important and dramatic use of GIS (Geographic
Information system) mapping technology is not for maps, but for
database management; data extraction by geographical area, mass
updating of data, and presentation of information graphically.
The extraction, analysis and presentation of GRIP database information
can be significantly enhanced through MRC's proprietary, state-of-the-art
digitizing system used in conjunction with the dynamic Atlas Graphics
map system programs. By digitizing all parcels in the City, MRC's
electronic mapping service will enable the City to access GRIP database
information by area and present it on maps. MRC's mapping service will
provide the City with the capability to extract, analyze and present other
database information (in addition to GRIP) for a variety of GIs
applications.
❑ SPECIAL ANALYSIS AND REPORTS
Given the many possibilities for the use of GRIP information, MRC can
assist the City in undertaking a variety of special analyses using GRIP
data alone or in conjunction with other data sources.
" Strengths, Weaknesses, Opportunities, Threats
13
8. COMPENSATION
Efficiencies and savings are gained by MRC from the common tasks
accomplished and data developed in providing the GRIP service in conjunction
with REAP. Accordingly, MRC's compensation (including expense
reimbursement) for implementing the Core GRIP service in conjunction with
REAP is $25,000. The fee includes:
❑ Development and integration of the database
❑ Licensing, delivery and installation of the GRIP Query System
• Training authorized staff in the use of the GRIP Query System
• Furnishing an easy-to-use user manual
• Preparing and delivering the initial GRIP Digest
Thereafter, maximizing the efficiencies and savings gained from the common
tasks accomplished and data developed in providing the GRIP service in
conjunction with REAP, MRC's compensation (including expense
reimbursement) shall be $1,500 per month, for as long as MRC continues to
provide Core GRIP services to the City, which include:
❑ Continuous maintenance, updating and integration of the database and
software support
❑ Delivery and installation of the quarterly updated GRIP Query System
❑ Training authorized staff (as needed) in the use of the Query System and
user manual
❑ Preparing and delivering the quarterly updated GRIP Digests
MRC's compensation for providing the initial and ongoing GRIP service is
payable after the City has received the services being invoiced and has sufficient
funds to cover the charges from a combination of accrued Audit Efficiency
Credits (see Exhibit B, Section 5.1) and the City's share of new revenue produced
from MRC's revenue enhancement audits.
Invoicing and payment for providing the GRIP service is thus deferred until
there is adequate revenue from a combination of MRC's Revenue Enhancement
Audit Program and/or Audit Efficiency Credits to cover it.
14
8.1 OPTIONAL/ADDITIONAL GRIP SERVICES
Should the City desire optional/additional GRIP services, such as those
described above, MRC will only charge an additional fee if the City and MRC so
agree in advance.
The data elements required for the GRIP service are typically provided in a
computer accessible format. Should we encounter a situation where this is not
the case and the City decides to have MRC assume responsibility for conversion
of data into a computer accessible format, MRC will only charge the City for
actual cost reimbursement.
In the event the City requires these or other optional/additional services that
require an additional charge, MRC shall provide the City with a not-to-exceed
budget in advance.
MRC's compensation/cost reimbursement for the optional/additional services is
also eligible for the self-funding program as previously described.
15
Attachment C-1
LICENSING AGREEMENT
for
GEOBASED REVENUE INFORMATION PROGRAM
This Agreement is made at San Bernardino, California, as of 1996,
by and between the City of San Bernardino, a municipal corporation (hereafter referred
to as "City") and Municipal Resource Consultants (hereafter referred to as "MRC"),
who agree as follows:
1. License. Subject to the terms and conditions set forth in this Agreement,
MRC shall provide to the City, a license to use MRCs software, database and other
property (hereafter referred to as "Property") as further described in Exhibit"C'_ MRC
shall provide said Property at the time, place, and in the manner specified in Exhibit
"C". MRC shall not be compensated for property outside the scope of Exhibit"C".
2. Restrictions. Said Property shall only be used by the City. The City shall
not sublet, duplicate or modify said Property. Said Property may only be used for the
purposes described in Exhibit "C'. Said Property shall be returned to MRC at the time
the license expires. MRC may terminate the license, at its sole option, if City violates
ally of the stated restrictions. The Property remains the sole and exclusive property of
MRC.
The license granted hereunder shall not imply ownership by City of said
Property, rights of City to sell said Property or rights to use said Property for the
benefits of others_ This license is transferable only with MRC's written consent.
3. Payment. City shall pay MRC for license rendered pursuant to this
Agreement at the times and in the manner set forth in Exhibit "C'. The payments
specified in Exhibit "C" shall be the only payments to be made to MRC for license
rendered pursuant to this agreement, unless the City approves additional
Conipensation for additional property. MRC shall submit all billings for license
rendered pursuant to this Agreement to City in the manner specified in Exhibit"C".
4. Exhibits. All Exhibits referred to herein are attached hereto and are by
t)tis reference incorporated herein.
1
5. Proprietary Information. As used herein, the term "proprietary
information", means any information which relates to internal controls, computer or
data processing programs, data that has been modified by MRC proprietary techniques
resulting in standardized, specifically correlated or integrated information, electronic
data processing applications, routines, subroutines, techniques or systems, or business
affairs and methods of operation or proposed methods of operation of MRC except
such information which is not obtained through tluis Agreement or which is in the
public domain at the time of its disclosure to the other party. City shall hold in
confidence using levels of effort consistent with its own policies applicable to its
confidential information and shall not disclose to any other party any MRC proprietary
information(as such term is herein defined) which may be disclosed to City by MRC in
connection with this Agreement or otherwise learned or obtained by City in connection
with this Agreement. The parties further agree not to take any other action inconsistent
with the confidential nature of MRC proprietary information. The obligations imposed
by this Paragraph shall survive any expiration or termination of this Agreement This
section shall not apply to any information that is public information.
6. Waiver. No waiver of any breach or failure or delay in exercising any
right, power or remedy shall constitute a waiver of same or of any provision hereof and
no waiver shall be effective unless in writing and signed by an authorized
representative of the party against whom enforcement of such waiver is sought.
7. Severability. The provisions of this Agreement are severable and the
uneilforceability of any provision of this Agreement shall not affect the enforceability of
this Agreement or any other provision hereof. In addition, in the event that any
provision of this Agreement is determined by a court to be unenforceable as drafted,
the parties acknowledge that it is their intention that such provision be construed in a
manner designed to effectuate the purposes of such provision to the fullest extent
enforceable under applicable law.
8. Taxes. City shall be responsible for the payment of any applicable taxes
in connection with the Agreement, except for any tax based on MRC's net income_
9. Governing. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
7
10. Remedies Cumulative. All remedies in this Agreement are cumulative
and in addition to and not in lieu of, any other remedies a party may have at law or in
equity.
11. Entire Agreement. This Agreement and the Exhibits hereto, which is
hereby incorporated herein by reference, shall constitute the entire agreement between
City and MRC with respect to its subject matter, shall supersede all prior agreements
and understandings, if any, between the parties respecting the subject matter hereof
and may be modified only by written agreement of the parties.
EXECUTED as of the day and year first above stated.
CITY OF SAN BERNARDINO
By:
Title:
Date:
MUNICIPAL RESOURCE CONSULTANTS
PARTNER: JOHN T. AUSTIN, INC.
By:
Title: President
Date: March 13 1996
3
• yz .
I
EXHIBIT D
r
GENERAL PROVISIONS
1. Independent Contractor. At all times during the term of this Contract,
Municipal Resource ConsuIaants (Consultant) shall be an Independent Contractor and
shall not be an employee of the City of San Bernardino (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 Agreement
2. Liabili . City shall not be called upon to assume any liability for direct
payment of any salaries, wages, or other compensation to any Consultant personnel or
subcontractor performing services hereunder for City, or any liability other than
provided for in this Agreement
City shall not be liable for compensation or indemnity to any Consultant
employee or subcontractor for injury or sickness arising out of his/her employment, or
for any negligent actions of the Consultant or its employees.
All persons employed in the performance of such services and functions shall be
employees of Consultant, and as such shall not, for any purposes, be considered
employees of City and therefore shall have no right to any City service, civil service, or
other City status.
3. Subcontracts. Any subcontracts entered into by Consultant.for services to be
rendered towards the completion of Consultant's portion of this Agreement shall be for
Consultant's benefit alone, and as such shall be its responsibility with no liability
resting on the City. Consultant agrees to provide a list of all subcontractors to be used
in connection with services to be rendered toward the completion of its portion of this
Agreement to the City within ten (10)working days of execution of this Agreement.
51. Licenses, Permits, Etc. Consultant represents and warrants to City that he has
all licenses, permits, qualifications and approvals of whatsoever nature which are
legally required for Consultant to practice his profession. Consultant represents and
warrants to City that Consultant shall, at W-% sole cost and expense, keep ill effect or
obtain at all times durM6 tiif� terin of this Agreerizent any licenses, permits, and
approvals which are legally required for Consultant to practice his profession.
GENERAL PROVISIONS
PAGE 2
5. Time. Consultant shall devote such time to the performance of services
pursuant to this Agreement as may be reasonably necessary for satisfactory
performance of Consultant's obligations pursuant to this Agreement Neither party
shall be considered in default of this Agreement to the extent performance is prevented
or delayed by any cause, present or future, which is beyond the reasonable control of
the party.
6. Insurance.
a. Public Liability__ During the tenon of this Agreement, Consultant shall
maintain in full force and effect a policy of public liability insurance with
minimum coverages as follows: $1,000,000 for injury to one person in any
one occurrence; $1,000,000 aggregate, and, $50,000.00 for property
damage. Consultant shall cause the City, its officials and employees to be
napped on all liability policies described above as insured as respects: (1)
activities performed for the City by or on behalf of the named insured, (2)
products and completed operations of the Named Insured, and (3)
premises owned, leased or used by the Named Insured.
b. Worker's Compensation. During the term of this Agreement, Consultant
shall fully comply with the terms of the law of California concerning
worker's compensation. Said compliance shall include, but not be limited
to, maintaining in full force and effect one or more policies of insurance
insuring against any liability Consultant may have for worker's
compensation.
7. Consultant Not Agent. Except as City may specify in writing, Consultant
shall have no authority, express or implied to act on behalf 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.
8. Assi nment Prohibited. No party to this Agreement may assign any right or
obligation pursuant to this agreement. Any attempt of purported assignment of any
right or obligation pursuant to this Agreement shall be void and of no effect.
y
GENERAL PROVISIONS
PAGE 3
9. Personnel. Consultant shall assign only competent personnel to perform
services pursuant to this Agreement. In the event that City, in its sole discretion, at any
time during the term of this Agreement, desires the removal of any person or persons
assigned by Consultant to perform services pursuant to this Agreemen4 Consultant
shall remove any such person immediately upon, receiving novice from City of the
desire of City for the removal of such person or persons.
10. Standard of Performance. Consultant shall perform all services required
pursuant to this Agreement in the manner and according to the standards observed by
a competent practitioner of the profession in which Consultant is engaged in the
geographical area in which Consultant practices his/her profession. All products of
whatsoever nature which Consultant delivers to City pursuant to this Agreement shall
be prepared in a substantial, first class and workmanlike manner and conform to the
standards of quality normally observed by a person practicing in Consultant's
profession.
11. Reports, Charts or Other Products. All reports, charts and other products
resulting from the performance of this agreement are the property of the City.
12. City Representative. The City Manager or his/her designee is the
representative of the City and will administer this Agreement for the City.
13. Termination. This Agreement may terminate on ten (10) days written notice
by either party, or within such time as both parties may find necessary to conclude the
work currently under way and to summarize Consultant's findings for City.
14. Indemnity and Hold Harmless. Consultant shall assume the defense of, and
indemnify and save harmless, the City, its officers, employees, and agents, and each
and every one of them, from and against all actions, damages, claims, losses or
expenses of every type and description including attorney's fees to which they may be
subjected or put, by reason of, or resulting from, the performance of the work, which is
caused in whole or in part by any negligent act or omission of the Consultant, and
subcontractor, anyone directly or indirectly employed by any of them or anyone for
whose acts any of there may be liable, whether or not it is caused in part by a party
i;idrrnnifie(l lik�x�euuuler-
4 4
GENERAL PROVISIONS
PAGE4
15. Waiver of Breach No waiver of the breach of any of the covenants,
agreements, restrictions or conditions of this Agreement by any party hereto shall be
construed to be a waiver of any succeeding breach of the same or other covenants,
agreements, restrictions or conditions of this Agreement No delay or omission of any
party hereto in exercising any right, power or remedy herein provided in the event of
default shall be construed as a waiver thereof, or acquiescence therein, nor shall the
acceptance of any payments made in a manner or at a time other than as herein
provided be construed as a waiver of or variation in any of the terms of this Agreement
16. Whole and Entire Agreement This instrument contains the whole and entire
agreement of the parties hereto and correctly sets forth the rights, duties and
obligations of each to the others as of its date. Any prior agreements, promises,
negotiations or representations not expressly set forth in this Agreement are of no force
and effect
17. Equal Employment Opportunity: During the performance of this
Agreement, Consultant, for itself, its assignees and successors in interest, agrees as
follows:
a. Compliance With Ferulations: Consultant shall comply with the
Executive Order 11246 entitled "Equal Employment Opportunity": as
labor regulations (41 C.F.R. Part 60), hereinafter referred to as the
"Regulations."
b. Nondiscrimination: Consultant, with regard to the work performed by it
after award and prior to completion of the work pursuant to this
Agreement, shall not discriminate on the ground of race, color, religion,
sex or national origin in the selection and retention of subcontractors,
including procurements of materials and leases of equipment-
C. Solicitation for Subcontractor, Including Procurements of Materials and
Equipnien In all solicitations either by competitive bidding or
negotiations made by Consultant for work to be performed under any
subcontract, including procurements of materials or equipment, such
potential subcontractor or supplier shall be notified by Consultant of
Consultant's obligation under this Agreement and the Regulations relative
to nondiscrimination on the ground of race, color, religion, sex or national
origins.
yw.
GENERAL PROVISIONS
PAGE
d. Information and Reports_: Consultant shall provide all information and
reports required by the Regulations, or orders and instructions issued
pursuant thereto, and will permit access to its books, records, accounts,
other sources of information and its facilities as may be determined by the
City to be pertinent to ascertain compliance with such Regulations, orders
and instructions. Where any information required of Consultant is in the
exclusive possession of another who fails or refuses to furnish this
information, Consultant shall so certify to the City and shall set forth what
efforts it ha's made to obtain the information.
e. Sanctions for Noncompliance: In the event of noncompliance by
Consultant with the nondiscrimination provisions of this Agreement, the
City shall impose such contract sanctions as it may determine to be
appropriate, including, but not limited to:
(1) Withholding of payments to Consultant under the contract until
Consultant complies;
(2) Cancellation, termination, or suspension of the Agreement, in
whole or in part.
f. Incorporation of Provisions: Consultant shall include the provisions of
paragraphs "a" through "e" in every subcontracts including Regulations,
order, or instructions issued pursuant thereto. Consultant shall take such
action with respect to any Regulations, order or instructions issued
pursuant thereto. Consultant shall take such action with respect to any
subcontract or procurement as the City may direct as a means of enforcing
such provisions, including sanctions for noncompiiarice; provided,
however, that in the event Consultant becomes involved in, or is
threatened with, litigation with a subcontractor or supplier as a result of
such direction, Consudtant may request City to enter such litigation to
protect the iilterests of the City.
y�.
GENERAL PROVISIONS
PAGE
18. Legal Interpretations. For purposes of this Agreement the City Attorney's
opizuon concerning the interpretation of local ordinances and the legal rights, duties
and obligations of the City regarding collection of taxes under State and local law shall
be controlling.
19. City's Determination Final. Whenever the City Council or 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 of this agreement that
determination shall be final and binding on the parties hereto.
20. Confidentiality. Consultant agrees that it shall keep all information it
receives concerning City taxpayers confidential and that it shall not use this
inforulation for any purpose other than as expressly provided in this Agreement or
otherwise expressly consented to by City.
21. 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
and addressed as follows:
To City:
CrrY OF SAN BEIZNARDINO
300 North D Street
San Bernardino, CA 92418
To Consultant: John Austin
MUNICIPAL RESOLTRCE CONSULTANTS
32107 W. Lindero Canyon Road
Suite 233
Westlake Village, CA 91361
Nothing in this Paragraph shall be construed to prevent the giving of notice by
personal service.