Honorable Mayor and Members of the City Council

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1 TO: ATTENTION: FROM: SUBJECT: Honorable Mayor and Members of the City Council Jeffrey L. Stewart, City Manager Tae Rhee, Finance Director/City Treasurer Approval of Agreement File No with HdL Software, LLC, for HdL Prime Business License Software, Web Module, and Business Tax Compliance Services DATE: August 10, 2015 EXECUTIVE SUMMARY Staff proposes the City enter into an agreement with HdL Software, LLC, to replace the business license software from HdL Classic to HdL Prime, which adds additional features such as online processing of business license applications and renewals. To help pay for HdL Prime, staff is also proposing to utilize HdL s Business Tax Compliance Services that will identify unlicensed businesses and collect applicable fees. RECOMMENDATION Approve Agreement File No with HdL Software, LLC, for HdL Prime business license software, web module, and Business Tax Compliance Services. FISCAL IMPACT HdL Prime will cost $30,000 to purchase. After implementation, the current annual maintenance fee of $9,762 will increase by $1,238, to $11,000, which will increase annually by the Consumer Price Index, but not less than 2% nor greater than 10%. HdL s Business Tax Compliance Services are designed to identify unlicensed businesses and collect applicable fees. The services will be paid on a contingency fee basis at a rate of 35% of actual revenues collected. If HdL s collection efforts are unsuccessful, then the non-responsive accounts will be transferred to the Code Enforcement Division at the City s sole discretion. If the Code Enforcement Division s collection efforts are successful, then HdL will receive a discounted fee of 20% instead of the regular 35% fee. The cost to purchase HdL Prime is proposed to be paid for (financed) with the fees collected through HdL s Business Tax Compliance Services. Under the proposed agreement, HdL will keep the first $46,154 fees collected through the Business Tax Compliance Services, and any additional revenues collected will be split between the City (65%) and HdL (35%). The first $46,154 fees are broken down as follows: Cost of HdL Prime $30,000 and 35% fee on the first $46,154 collected $16, / Page 1 of 2-1 -

2 Staff Report HdL Prime Business License Software and Compliance Management Discovery Program August 10, 2015 Page 2 of 2 BACKGROUND In 1997, the City of Bellflower entered into an agreement with HdL Software, LLC, to utilize its software, HdL Classic, to administer the City s business license program. Since then, HdL Software, LLC, has released a major upgrade to its software known as HdL Prime, which includes numerous enhancements that will increase staff efficiency. HdL Prime added enhancements including online application and renewal of business licenses and certain automated business licensing features. HdL Prime simplifies data processing and the sharing of critical information across departments while improving timely communication among the office staff, field staff, and business owners. The most significant enhancement to the software will be the online business renewals by the business owners, as that feature will save considerable data entry time by staff as well as eliminating any potential input errors that can occur when transferring information from paper into the City s business license database. HdL Prime is proposed to be paid for with the fees collected through HdL s Business Tax Compliance Services, which are designed to identify noncompliant business owners in the City by comparing the City s business license database to various other business databases. HdL s compliance program is highly comprehensive involving the identification of unlicensed businesses, notifications, calculation of fees owed, collection of identified amounts, and document processing. HdL implements the program with a business friendly approach and allows for customization by the City while providing little impact on City resources. ATTACHMENT Agreement File No Doc /

3 CITY OF BELLFLOWER AGREEMENT FILE NO AGREEMENT FOR PROFESSIONAL SERVICES HdL SOFTWARE, LLC (Business License Software, Web Module, and Business Tax Compliance Services) THIS AGREEMENT is made and effective as of August 10, 2015, between the City of Bellflower, a municipal corporation ( City ), and HdL Software, LLC, a California corporation ( Consultant ). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. TERM This Agreement shall commence on August 10, 2015, and shall remain and continue in effect until terminated pursuant to the provisions of this Agreement. 2. SERVICES Consultant shall perform the tasks described and set forth in Exhibit A, attached hereto and incorporated herein as though set forth in full. Consultant shall complete the tasks according to the schedule of performance which is also set forth in Exhibit A. 3. PERFORMANCE Consultant shall at all times faithfully, competently, and to the best of his/her ability, experience, and talent perform all tasks described herein. Consultant shall employ, at a minimum, generally accepted standards and practices utilized by persons engaged in providing similar services as are required of Consultant hereunder in meeting its obligations under this Agreement. 4. CITY MANAGEMENT City s Director of Finance shall represent City in all matters pertaining to the administration of this Agreement, review and approval of all products submitted by Consultant, but not including the authority to enlarge the Tasks To Be Performed or change the compensation due to Consultant. City s City Manager shall be authorized to act on City s behalf and to execute all necessary documents which enlarge the Tasks To Be Performed or change Consultant s compensation, subject to Section 5 hereof. 5. PAYMENT (a) City agrees to pay Consultant monthly or annually, in accordance with the payment rates and terms and the schedule of payment as set forth in Exhibit B, attached hereto and incorporated herein by this reference as though set forth in full, based upon actual time spent on the above tasks. Page 1 of 8-3 -

4 Agreement File No HdL Software, LLC Page 2 of 8 (b) Consultant shall not be compensated for any services rendered in connection with its performance of this Agreement which are in addition to those set forth herein, unless such additional services are authorized in advance and in writing by the City Manager. Consultant shall be compensated for any additional services in the amounts and in the manner as agreed to by City Manager and Consultant at the time City s written authorization is given to Consultant for the performance of said services, but based on the rates set forth in Exhibit B. The City Manager may approve amendments to this Agreement for additional work up to the amount authorized pursuant to the most recent Council-approved administrative and budget policies relating to the City Manager's authority and threshold to enter into new agreements, currently Twenty Thousand Dollars ($20,000) per fiscal year and adjusted annually on July 1 by an applicable Consumer Price Index. Any additional work in excess of the City Manager s authority and threshold shall be approved by the City Council. (c) Consultant will submit invoices monthly for actual services performed. Invoices shall be submitted on or about the first business day of each month, or as soon thereafter as practical, for services provided in the previous month. Payment shall be made within thirty (30) days after receipt of each invoice as to all non-disputed fees. If City disputes any of Consultant s fees, then it shall give written notice to Consultant within thirty (30) days after receipt of an invoice of any disputed fees set forth on the invoice. 6. SUSPENSION OR TERMINATION OF AGREEMENT WITHOUT CAUSE (a) City may at any time, for any reason, with or without cause, suspend or terminate this Agreement, or any portion hereof, by serving upon Consultant at least ten-days (10-days ) prior written notice. Upon receipt of said notice, Consultant shall cease all work under this Agreement on the termination date, unless notice provides otherwise. If City suspends or terminates a portion of the Agreement, then such suspension or termination shall not make void or invalidate the remainder of this Agreement. (b) Consultant may at any time, for any reason, with or without cause, suspend or terminate this Agreement, or any portion hereof, by serving upon City at least sixty-days (60-days ) prior written notice. Upon City s receipt of said notice, Consultant shall fully cooperate with City all work under this Agreement through the termination date, unless City directs otherwise. If Consultant suspends or terminates a portion of the Agreement, then such suspension or termination shall not make void or invalidate the remainder of this Agreement. (c) In the event this Agreement is terminated pursuant to this Section, City shall pay to Consultant the actual value of the work performed up to the time of termination; provided, that the work performed is of value to City. Upon termination of the Agreement pursuant to this Section, Consultant will submit an invoice to City pursuant to Section

5 Agreement File No HdL Software, LLC Page 3 of 8 7. DEFAULT OF CONSULTANT (a) Consultant s failure to comply with the provisions of this Agreement shall constitute a default. In the event that Consultant is in default for cause under the terms of this Agreement, City shall have no obligation or duty to continue compensating Consultant for any work performed after the date of default and can terminate this Agreement immediately by written notice to Consultant following notice of default and an opportunity to cure, as set forth in subsection (b) of this Section. If such failure by Consultant to make progress in the performance of work hereunder arises out of causes beyond Consultant s control, and without fault or negligence of Consultant, then it shall not be considered a default. (b) If the City Manager, or his/her delegate, determines Consultant is in default in the performance of any of the terms of this Agreement, then he/she shall cause to be served upon Consultant a written notice of the default. Consultant shall have ten (10) days after service upon it of said notice in which to cure the default by rendering a satisfactory performance. In the event that Consultant fails to cure its default within such period of time, City shall have the right, notwithstanding any other provision of this Agreement, to terminate this Agreement without further notice and without prejudice to any other remedy to which it may be entitled at law, in equity or under this Agreement. 8. OWNERSHIP OF DOCUMENTS (a) Consultant shall maintain complete and accurate records with respect to sales, costs, expenses, receipts, and other such information required by City that relates to the performance of services under this Agreement. Consultant shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Consultant shall provide free access to the representatives of City or its designees at reasonable times to such books and records; shall permit City to make transcripts therefrom as necessary; and shall allow inspection of all work, data, documents, proceedings, and activities related to this Agreement. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment. (b) Upon completion of, or in the event of termination or suspension of this Agreement, all original documents, designs, drawings, maps, models, computer files, surveys, notes, and other documents prepared in the course of providing the services to be performed pursuant to this Agreement shall become the sole property of City and may be used, reused, or otherwise disposed of by City without the permission of Consultant. With respect to computer files, Consultant shall make available to City, at Consultant s office and upon reasonable written request by City, the necessary computer software and hardware for purposes of accessing, compiling, transferring, and printing computer files

6 Agreement File No HdL Software, LLC Page 4 of 8 (c) Proprietary Information of Consultant. As used in this Section 8.C, the term proprietary information'' means any information that relates to Consultant's computer or data processing programs; data processing applications routines, subroutines, techniques or systems; or business processes. City shall hold in confidence and shall not disclose to any other party any of Consultant's proprietary information in connection with this Agreement, or otherwise learned or obtained by City in connection with this Agreement, unless disclosure is required under federal or state law, including without limitation the Freedom of Information Act or the Public Records Request Act. Consultant shall retain ownership and rights to all proprietary information. The obligations imposed by this Section 8.C. shall survive any expiration or termination of this Agreement. 9. INDEMNIFICATION (a) Indemnification for Professional Liability. When the law establishes a professional standard of care for Consultant s Services, to the fullest extent permitted by law, Consultant shall indemnify, protect, defend, and hold harmless City and each of its officers, employees, and agents (the Indemnified Parties ) from and against any and all losses, liabilities, damages, costs, and expenses, including attorneys fees and costs to the extent same are caused in whole or in part by any negligent or wrongful act, error, or omission of Consultant, its officers, agents, employees, or subcontractors (or any entity or individual that Consultant shall bear the legal liability thereof) in the performance of professional services under this Agreement. (b) Indemnification for Other Than Professional Liability. Other than in the performance of professional services and to the full extent permitted by law, Consultant shall indemnify, defend, and hold harmless the Indemnified Parties from and against any liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses, or costs of any kind, whether actual, alleged, or threatened, including attorneys fees and costs, court costs, interest, defense costs, and expert witness fees), where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, the performance of this Agreement by Consultant or by any individual or entity for which Consultant is legally liable, including, but not limited to, officers, agents, employees, or subcontractors of Consultant. (c) General Indemnification Provisions. Consultant agrees to obtain executed indemnity agreements with provisions identical to those set forth in this Section from each and every subcontractor or any other person or entity involved by, for, with, or on behalf of Consultant in the performance of this Agreement. In the event Consultant fails to obtain such indemnity obligations from others as required here, Consultant agrees to be fully responsible according to the terms of this Section. Failure of City to monitor compliance with these requirements imposes no additional obligations on the Indemnified Parties and will in no way act as a waiver of any rights hereunder. This obligation to indemnify and defend the Indemnified Parties as set forth herein is binding - 6 -

7 Agreement File No HdL Software, LLC Page 5 of 8 on the successors, assigns, or heirs of Consultant and shall survive the termination of this Agreement or this Section. The indemnification and defense obligations set forth in this Section shall apply whether or not there is active negligence, passive negligence, or any act for which any of the Indemnified Parties may be strictly liable; provided, however, that such obligations shall not be applicable to liability caused by the sole negligence or willful misconduct of any of the Indemnified Parties. 10. INSURANCE During the entire term of this Agreement, Consultant shall maintain insurance coverage as specified in Exhibit C, attached hereto and hereby made part of this Agreement. 11. INDEPENDENT CONTRACTOR (a) Consultant is and shall at all times remain as to City a wholly independent contractor. The personnel performing the services under this Agreement on behalf of Consultant shall at all times be under Consultant s exclusive direction and control. Neither City nor any of its officers, employees, or agents shall have control over the conduct of Consultant or any of Consultant s officers, employees, or agents, except as set forth in this Agreement. Consultant shall not at any time or in any manner represent that it or any of its officers, employees, or agents are in any manner officers, employees, or agents of City. Consultant shall not incur or have the power to incur any debt, obligation, or liability whatever against City, or bind City in any manner. (b) No employee benefits shall be available to Consultant in connection with the performance of this Agreement. Except for the fees paid to Consultant as provided in the Agreement, City shall not pay salaries, wages, or other compensation to Consultant for performing services hereunder for City. City shall not be liable for compensation or indemnification to Consultant for injury or sickness arising out of performing services hereunder. 12. LEGAL RESPONSIBILITIES Consultant shall keep itself informed of State and Federal laws and regulations which in any manner affect those employed by it or in any way affect the performance of its service pursuant to this Agreement. Consultant shall at all times observe and comply with all such laws and regulations. City, and its officers and employees, shall not be liable at law or in equity occasioned by failure of Consultant to comply with this Section. 13. UNDUE INFLUENCE Consultant declares and warrants that no undue influence or pressure is used against or in concert with any officer or employee of City in connection with the award, terms, or implementation of this Agreement, including any method of coercion, - 7 -

8 Agreement File No HdL Software, LLC Page 6 of 8 confidential financial arrangement, or financial inducement. No officer or employee of City will receive compensation, directly or indirectly, from Consultant, or from any officer, employee, or agent of Consultant, in connection with the award of this Agreement or any work to be conducted as a result of this Agreement. Violation of this Section shall be a material breach of this Agreement entitling City to any and all remedies at law or in equity. 14. NO BENEFIT TO ARISE TO LOCAL EMPLOYEES No member, officer, or employee of City, or their designees or agents, and no public official who exercises authority over responsibilities with respect to the Project during his/her tenure or for one (1) year thereafter, shall have any interest, direct or indirect, in any agreement or sub-agreement, or the proceeds thereof, for work to be performed in connection with the Services performed under this Agreement. 15. RELEASE OF INFORMATION/CONFLICTS OF INTEREST (a) All information gained by Consultant in performance of this Agreement shall be considered confidential and shall not be released by Consultant without City s prior written authorization. Consultant, its officers, employees, agents, or subcontractors, shall not without written authorization from the City Manager or unless requested by the City Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories, or other information concerning the work performed under this Agreement. Response to a subpoena or court order shall not be considered voluntary provided Consultant gives City notice of such court order or subpoena. (b) Consultant shall promptly notify City should Consultant, its officers, agents, or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions, or other discovery request, court order, or subpoena from any person or party regarding this Agreement and the work performed thereunder. City retains the right, but has no obligation, to represent Consultant and/or be present at any deposition, hearing, or similar proceeding. Consultant agrees to cooperate fully with City and to provide the opportunity to review any response to discovery requests provided by Consultant. However, City s right to review any such response does not imply or mean the right by City to control, direct, or rewrite said response. 16. NOTICES Any notices which either party may desire to give to the other party under this Agreement must be in writing and may be given either by 1) personal service; 2) delivery by a reputable document delivery service, such as, but not limited to, Federal Express, which provides a receipt showing date and time of delivery; or 3) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed - 8 -

9 Agreement File No HdL Software, LLC Page 7 of 8 to the address of the party as set forth below or at any other address as the party may later designate by notice. To City: To Consultant: City of Bellflower Attention: Tae Rhee, Finance Director Civic Center Drive Bellflower, CA (562) x 2234 trhee@bellflower.org HdL Software, LLC Attention: George Bonin 1340 Valley Vista Drive, Suite 200 Diamond Bar, CA (909) GBonnin@hdlcompanies.com 17. ASSIGNMENT Consultant shall not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, without prior consent of City. Because of the personal nature of the services to be rendered pursuant to this Agreement, only Consultant shall perform the services described in this Agreement. Consultant may use assistants, under its direct supervision, to perform some of the services under this Agreement. Consultant s sole compensation shall be payment for actual services performed up to, and including, the date of termination or as may be otherwise agreed to in writing between the City Council and Consultant. 18. LICENSES At all times during the term of this Agreement, Consultant shall have in full force and effect all licenses required of it by law for the performance of the services described in this Agreement. 19. GOVERNING LAW City and Consultant understand and agree that the laws of the State of California shall govern the rights, obligations, duties, and liabilities of the parties to this Agreement and also govern the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in the state or federal district court with jurisdiction over the City of Bellflower

10 Agreement File No HdL Software, LLC Page 8 of ENTIRE AGREEMENT This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party s own independent investigation of any and all facts such party deems material. 21. AUTHORITY TO EXECUTE THIS AGREEMENT The person or persons executing this Agreement on behalf of Consultant warrants and represents that he/she has the authority to execute this Agreement on behalf of Consultant and has the authority to bind Consultant to the performance of its obligations hereunder. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed. CITY OF BELLFLOWER, a general law city HdL SOFTWARE, LLC By: Jeffrey L. Stewart, City Manager By: Robert Gray, President Attest: Debra D. Bauchop, City Clerk Approved As To Form: By: Jeffrey Schmehr Chief Financial Officer Joseph W. Pannone, City Attorney Exhibit A: Exhibit B: Exhibit C: Scope of Services/Schedule of Performance Payment Schedule Insurance Requirements Doc

11 CITY OF BELLFLOWER AGREEMENT FILE NO EXHIBIT A SCOPE OF SERVICES/SCHEDULE OF PERFORMANCE HdL PRIME BUSINESS LICENSE SYSTEM MIGRATION 1. City Management Support HdL will assist City in evaluating current policies and procedures in order to enhance operational efficiency. This may include suggestions to redesign forms/reports, alter existing text, or implement new processes or adopt new strategies for improving communication with the business community and other City departments. 2. Data Conversion HdL will convert the City s existing data. As City is migrating from HdL Classic Business License, City will provide a current backup of the existing Microsoft Access or Microsoft SQL Server HdL database. This data will be required a minimum of two times during the conversion process. 3. Implementation a. HdL's responsibilities Project manager - HdL will provide a project manager (PM) to guide the software implementation process. The primary responsibility for the HdL PM is to ensure successful and timely completion of each step of the software implementation schedule. HdL s PM will work closely with City's designated project manager to define the software implementation schedule, identify City needs and configure the software accordingly, validate the data conversion, provide user training, and generally shepherd City through the software implementation process. IT support - HdL will provide a dedicated IT staff member to provide IT support during the software implementation process. This individual will provide the necessary instruction and assistance in order to install the software in City's computing environment, and will provide any needed technical support. Training - HdL will provide software training as defined in the agreed upon software implementation schedule. For HdL Prime migration, this generally consists of one six-hour training session for up to six individuals. User manual - HdL will provide a digital copy of the software user manual. City may print copies of the manual or distribute digital copies for internal use by City staff. The user manual contains proprietary and confidential information, and as such is bound by the confidentiality portion of this Agreement. The user manual may not in any circumstances be distributed to any 3 rd party or any individual that Page 1 of

12 Agreement File No Exhibit A Page 2 of 6 is not a current City staff member responsible for using or maintaining the software. b. City's responsibilities Project manager - City will designate a staff member to serve as City's project manager (PM). This individual must be intimately involved in the daily business processes which the software will automate, and be empowered to make, or quickly secure from management, decisions required for the implementation of the software. The primary responsibility for City PM is to ensure that all City responsibilities during the software implementation are met according to the agreed upon software implementation schedule. City PM will be instrumental in the successful implementation of the software; working closely with the HdL PM to verify data conversion, review and approve reports, establish business rules, and configure all aspects of the software. IT support - City will designate an IT staff member to work with HdL staff throughout the software implementation process. This individual must be knowledgeable about City's computing environment and be authorized to manage the SQL Server database and install and configure software on the network server and workstations. The primary responsibility of City s IT designee is to provide data to HdL for conversion (if required), install the SQL Server database, and install the software in City's computing environment. 4. Software License HdL hereby provides a license to the City to use HdL s software. The software shall only be used by the City. The City shall not sublet, duplicate, modify, decompile, reverse engineer, disassemble, or attempt to derive the source code of said software. The license granted hereunder shall not imply ownership by City of said software, rights of the City to sell said software, or rights to use said software for the benefits of others. This license is not transferrable. City shall not create any derivative work or product based on or derived from the Software or documentation, or modify the Software or documentation without the prior written consent of HdL. In the event of a breach of this provision (and without limiting HdL s remedies), said modification, derivative work or product based on the Software or documentation is hereby deemed assigned to HdL. Upon termination, the software license shall expire, all copies of the software shall be removed from the City s computers and network and all digital copies deleted or otherwise destroyed. 5. Payment Gateway For online payment functionality, HdL Prime includes certain built in payment processing services. Should City require a different payment gateway solution, there will be a development cost of approximately $5,000 to establish the integration

13 Agreement File No Exhibit A Page 3 of 6 BUSINESS TAX COMPLIANCE SERVICES FULL SERVICE HdL will identify, validate, and initiate contact with leads on behalf of the City. HdL will match select data sources to City s business license data in order to identify potentially unlicensed businesses (leads). HdL staff will manually review each lead for priority and accuracy before establishing contact with the business (customer). HdL will then contact the customer informing them of the need to acquire a business license. The customer will respond with a completed application and payment of prior and current year tax and penalties. HdL will review the application and payment for accuracy, then forward on to City for processing. HdL will submit up to three (3) notification letters to leads. If compliance is not achieved after these notification letters, the lead will be turned over to City s internal enforcement division to establish direct contact with the customer. 1. City s responsibilities a. Data City will provide its business license database (registrations, payments, and any other information necessary for the audit process or to facilitate HdL s invoicing of services) to HdL according to a schedule acceptable to both HdL and City. City agrees to provide the data as long as this Agreement is active, and thereafter for so long as HdL s right to invoice for services rendered continues. b. Notification letters If City has specific notification letters that should be used during the discovery process, then those letters should be provided to HdL. NOTE HdL has standard notification letters that can be used. c. City agrees to use reasonable and diligent efforts to collect, or to assist HdL in the collection of, deficiencies identified by HdL pursuant to this Agreement. 2. HdL s responsibilities a. Notification letters HdL will provide sample notification letters to City for approval. If City has provided specific notification letters, then HdL will incorporate those letters and provide a finished version for review. HdL will not use any notification letter without prior approval by City. b. Leads HdL will generate leads by matching available data sources to City s business license data. HdL will manually verify leads before establishing contact by phone or letter. Phone contact will be limited to verification of the business s existence. All further contact from HdL will be by mail. All incoming applications or renewals submitted with payment will be forwarded on to City. All leads that have not responded (silent leads) will be submitted to City after the third notification attempt. City may then use the silent leads list with internal enforcement methods to bring the lead into compliance. All applications/renewals

14 Agreement File No Exhibit A Page 4 of 6 achieved through this Agreement (including silent leads) should be flagged in the business license database to aid in the invoicing process. GENERAL MAINTENANCE AND SUPPORT 1. Customer Support HdL will provide customer support by telephone, , and the web as needed by City during the term of this Agreement. In the United States, no charge support from HdL Software is available as follows: For customer support between the hours of 8:00 a.m. and 5:00 p.m. Pacific time, Monday through Friday, help@hdlcompanies.com or call HdL offices and ask for software application support. For technical support before 8:00 a.m. or after 5:00 p.m. Pacific time, Monday through Friday (or anytime Saturday), 911@hdlcompanies.com and an HdL staff member will be paged. Please only include your name, agency, and contact # in s to 911@hdlcompanies.com. You will be contacted as soon as possible. 2. Support policy regarding reports HdL provides a number of reports with the installation of the software. Those reports are developed using Crystal Reports and fall into one of two categories, standard or HdL custom developed. HdL provides support on standard and HdL custom developed reports, provided that the reports have not been modified by the client or other third party. As part of support, HdL will make minor modifications to reports as needed by City. This includes change of logo, phone #, address, signatures, and minor text edits. Other report edits and modifications requested by City are not covered under the Software Use Fee, and will be developed on a time-and-material basis at the current rate. 3. Software Upgrades Except to the extent that upgrades of the software include new modules or features not previously offered as part of the software as of the date hereof, City is entitled to upgrades of the software within the cost of this Agreement. Though rare, additional costs may apply depending on the extent of the upgrade. Potential additional costs include training, consulting, configuration, or other requested services. 4. Outside Connections to HdL database HdL programs rely on the integrity of the database to operate properly. As such, it is critical that any outside connection to the database be implemented with HdL s full knowledge and participation. Only read only connections will be established to the HdL database

15 Agreement File No Exhibit A Page 5 of 6 No modifications will be made to the HdL database, including database/table design and data content. Any repair work necessary due to violations of the above items will not be covered by the Software Use Fee, and as such will be billable to the client on a time-and-material basis. City shall contact HdL for instructions if any added functionality is required, including reading additional data or writing to the HdL database. SYSTEM REQUIREMENTS The software and database will be installed on the City s network on hardware supplied by City. Any specifications provided below indicate minimum requirements. It is City s responsibility to ensure that any hardware used to host the software/database or run the client application meets the specifications dictated by the operating system and any software/services hosted by the hardware. For example, minimum operating system specifications will not be sufficient if the file server is also hosting City s system. 1. Application Server Specifications: The application server will host the HdL Prime web service, which serves as the HdL Prime business layer. MS Windows Server 2003, 2003 R2, 2008, 2008 R2, 2012, 2012 R2 IIS v6.0 or later.net Framework gigabyte disk space 2. Web Server Specifications: The web server will host the public accessible website. MS Windows Server 2003, 2003 R2, 2008, 2008 R2, 2012, 2012 R2 IIS v6.0 or later.net Framework gigabyte disk space SSL certificate 3. Database Server Specifications: The database server will host all application data. The database server should be dedicated to server related functions. Using a client s PC as the database server in a multi-user environment is not supported. MS SQL Server 2005, 2008, 2008 R2, 2012, 2014 (Express variants also supported) 15 gigabytes disk space to allow for initial database and growth Any Windows Server version that supports the selected SQL Server version is supported; provided it meets the hardware specifications indicated by both the operating system and the version of SQL Server

16 Agreement File No Exhibit A Page 6 of 6 4. Workstation Specifications: The software will be run on the client workstation. The hardware recommendations below are based on user feedback regarding performance levels. Memory 4 GB Video 1280x1024 Operating System Windows XP Pro, Vista, 7, 8, Network Specifications: The software communicates via web services and is designed to operate efficiently over the network. High-speed local area network connections will provide the best system response, but Prime will also run over slower WAN connections such as T1 or mobile broadband. 6. Printer Specifications: The software is designed to work with laser printers. A PCL compliant laser printer is recommended. Each make and model of printer has different drivers and therefore has slightly different results when printing. We design forms/reports using HP LaserJet printers. TIMELINE FOR HdL PRIME MIGRATION The default timeline for complete implementation (including Go Live ) of the software is approximately 45 days from the start of implementation. When the Agreement is signed by all parties, HdL will immediately work with City to establish a specific implementation schedule. However, City understands that the agreed upon timeline will be conditional upon meeting the requirements of the implementation schedule. HdL and City will also work to establish the schedule for the Compliance Services

17 CITY OF BELLFLOWER AGREEMENT FILE NO EXHIBIT B PAYMENT SCHEDULE COMPLIANCE MANAGEMENT DISCOVERY AND HdL PRIME SOFTWARE MIGRATION WITH WEB Fees for the Prime Software will be paid from Revenues Collected (as defined below); provided, that the parties understand subparagraph 8. b., below, may be applied by HdL. Services Compensation Cost of HdL Prime Software $30,000 Compensation for Tax Discovery Services $16,154 Total Cost $46,154 Discovery 1 st $46,154 Collected 100% of Revenues Collected 1,3 Additional Discovery Beyond $46,154 35% or 20% of Revenues Collected 1,2,3 Annual Software Use Fee $11,000 1 Revenues Collected is defined as the total amount of City revenue (taxes, penalties, interest, etc.) identified or collected as part of this Agreement. HdL is entitled to compensation based on 35% of the Revenues Collected from business taxpayers who become current solely through HdL s contact. 2 HdL is entitled to compensation based on 20% of Revenues Collected from business taxpayers who become current after HdL s contact and the business is then referred to City for collection. City has the sole discretion to decide whether to pursue collection for any referred business. 3 For all noncompliant businesses discovered through HdL s discovery program, City has the right to settle with a taxpayer for a lesser amount. HdL will only be entitled to apply the percentage fee on the actual amount collected whether or not the City settles for a lesser amount than assessed. Additional User Licenses Customizations Optional Services 2, Per user license + $500 Use Fee Increase per license Per hour Page 1 of

18 Agreement File No Exhibit B Page 2 of 3 1. Software License. Migration to HdL Prime Business License includes the following: Software license for 25 named users, installation, implementation, complete review of existing operation, fees, penalties, municipal code, standard reports/forms/letters, data conversion, one six-hour day of training for up to six individuals. It also includes the web renewal module, new application module, installation and implementation. 2. Software Use Fee. The software use fee shall begin on the go-live date as determined by the established implementation schedule and renewed annually. The software use fee shall be adjusted at the beginning of each anniversary year following the first year of service. Each software use fee adjustment shall not be less than two percent (2%) or greater than ten percent (10%) and shall be based upon the most recently published Consumer Price Index (CPI), Los Angeles Metropolitan area, all urban consumers at the time the annual use fee invoice is produced by HdL. 3. Travel Expenses. Travel and lodging expenses are billed as per the latest published per diem allowable cost by the U.S. Internal Revenue Service for the Los Angeles Metropolitan Area and apply to all meetings; including process, preinstallation, installation, training, and support. 4. Parcel Data. The land management module allows tracking of parcel data. There are four ways to populate the land management parcel data. a. Because City is a client for HdL property tax services, then the parcel data will be provided at no cost. b. If City wishes to use any other parcel data set, and is able to provide the data in a format approved by HdL, then the parcel data may be imported using standard functionality provided in Land Management. There is no cost. c. If the City wishes to use any other parcel data set, and is unable to provide the data in a format approved by HdL, then a re-useable utility can be developed to convert the parcel data into the proper format. The development of this utility will be billed on a time-and-material basis. Once the source data has been reviewed, a statement of work will be provided including a cost estimate. 5. Finance/Cashiering System Integration (optional). This enables the financial data export module. The cost is $2, Training (optional). The cost for additional training is: Onsite at the City - $ Per Hour (six-hour training day for up to six individuals)

19 Agreement File No Exhibit B Page 3 of 3 7. Customizing Services The software is a table-driven system and has been developed to meet almost all of the needs of City. However, should the need occur, HdL is available to provide custom enhancements to the software on a pre-determined time-and-material basis. No work shall be performed without prior written approval of City. 8. Payment Schedule Compensation for the contract amount shall be as follows: a. Annual Software Use Fees The annual software use fee is due upon Go Live. The amount will be prorated to align with City s current renewal cycle of April through March and adjusted for the prepaid Classic use fee. The annual use fee plus any applicable CPI will be due annually thereafter. b. Software Fees - HdL will install and implement the HdL Prime Business License Software with full Web Module upon execution of this Agreement. Compensation for the agreed to services shall be paid for through City s portion of the proceeds from the HdL Business Tax Compliance Services until fully paid. City may be billed for any outstanding amounts if, upon the effective date of the termination of this Agreement or in three years after the execution of this Agreement, Revenues Collected have not equaled or exceeded $46,154. The amount payable by City is limited to 65% of the difference between $46,154 and Revenues Collected. c. Compliance Service Fees Payment of compliance service fees is due and payable within 30 days after receipt of invoice from HdL. 9. Miscellaneous Expenses - HdL will notify City of any miscellaneous expenses and request authorization to proceed. HdL will not be reimbursed for any miscellaneous expenses unless authorized by City. Miscellaneous expenses may include travel, lodging and meal expenses, and other expenses which are above and beyond the ordinary expenses associated with performance of this Agreement. 10. Pricing Adjustments - All pricing listed in this contract will be honored throughout implementation of the project. Any additional/optional services needed after the golive date will be provided using the pricing currently established at the time the service is requested

20 CITY OF BELLFLOWER AGREEMENT FILE NO EXHIBIT C INSURANCE REQUIREMENTS Prior to the beginning of and throughout the duration of the Work, Consultant will maintain insurance in conformance with the requirements set forth below. Consultant will use existing coverage to comply with these requirements. If that existing coverage does not meet the requirements set forth here, Consultant agrees to amend, supplement or endorse the existing coverage to do so. Consultant acknowledges that the insurance coverage and policy limits set forth in this Section constitute the minimum amount of coverage required. Any insurance proceeds available to City in excess of the limits and coverage required in this Agreement and which is applicable to a given loss, will be available to City. Consultant shall provide the following types and amounts of insurance: Commercial General Liability Insurance using Insurance Services Office Commercial General Liability policy form CG or the exact equivalent. Defense costs must be paid in addition to limits. There shall be no cross-liability for claims or suits by one insured against another. Limits are subject to review but in no event less than $1,000,000 (One Million Dollars) per occurrence for all covered losses and no less than $2,000,000 (Two Million Dollars) general aggregate. Business Auto Coverage on ISO Business Auto Coverage form CA including symbol 1 (Any Auto) or the exact equivalent. Limits are subject to review, but in no event to be less than $1,000,000 (One Million Dollars) per accident. If Consultant owns no vehicles, this requirement may be satisfied by a non-owned auto endorsement to the general liability policy described above. If Consultant or Consultant s employees will use personal autos in any way for these Services, Consultant shall provide evidence of personal auto liability coverage for each such person. Excess or Umbrella Liability Insurance (Over Primary) if used to meet limit requirements, shall provide coverage at least as broad as specified for the underlying coverage. Any such coverage provided under an umbrella liability policy shall include a drop down provision providing primary coverage above a maximum $25,000 selfinsured retention for liability not covered by primary but covered by the umbrella. Coverage shall be provided on a pay on behalf basis, with defense costs payable in addition to policy limits. Policy shall contain a provision obligating insurer at the time insured s liability exclusion precluding coverage for claims or suits by one insured against another. Coverage shall be applicable to City for injury employees of Consultant, subcontractors or others involved in the work. The scope of coverage provided is subject to approval of City following receipt of proof of insurance as required herein. Limits are subject to review but in no event less than $1,000,000 per occurrence. Professional Liability or Errors and Omissions Insurance as appropriate shall be written on a policy form coverage specifically designed to protect acts, errors or omissions of Page 1 of

21 Agreement File No Exhibit C Page 2 of 5 Consultant and Covered Professional Services as designated in the policy must specifically include work performed under this Agreement. The policy limit shall be no less than $1,000,000 (One Million Dollars) per claim and in the aggregate. The policy must pay on behalf of the insured and must include a provision establishing the insurer s duty to defend. The policy retroactive date shall be on or before the effective date of this Agreement. Insurance procured pursuant to these requirements shall be written by insurers that are admitted carriers in the State of California and with an A.M. Bests rating of A- or better and a minimum financial size VII. Other carriers will be considered on a case-by-case basis at the sole discretion of the City. Other carriers to be considered must be submitted for review. City s acceptance of alternate carriers must be in writing. General conditions pertaining to provisions of insurance coverage by Consultant. Consultant and City agree to the following with respect to insurance provided by Consultant: 1. Consultant agrees to have its insurer endorse the third party general liability coverage required herein to include as additional insured City, its officers, employees, and agents using standard ISO endorsement No. CG with an edition prior to Consultant also agrees to require all contractors and subcontractors to do likewise. Other additional insured endorsement forms will be considered on a case-by-case basis at the sole discretion of the City. Other forms to be considered must be submitted for review. City s acceptance of forms other than CG must be in writing. 2. No liability insurance coverage provided to comply with this Agreement shall prohibit Consultant, or Consultant s employees or agents, from waiving the right of subrogation prior to a loss. Consultant agrees to waive subrogation rights against City regardless of the applicability of any insurance proceeds, and to require all contractors and subcontractors to do likewise. 3. All insurance coverage and limits provided by Contractor and available or applicable to this Agreement are intended to apply to the full extent of the policies. Nothing contained in this Agreement or any other agreement relating to the City or its operations limits the application of such insurance coverage. 4. None of the coverage required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to City and approved of in writing. 5. No liability policy shall contain any provision or definition that would serve to eliminate so-called third party action over claims, including any exclusion for bodily injury to an employee of the insured or of any contractor or subcontractor. 6. All coverage types and limits required are subject to approval, modification, and additional requirements by the City, as the need arises. Consultant shall not