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CM-2020-068 - 3/6/2020Professional Services Agreement This Agreement is entered into by TexasC itySery ices LLC, a Texas Limited Liability Company, herein called "Firm", and the City of Round Rock, Texas referred to herein as "Client". In consideration of the mutual promises herein contained, Firm and Client agree that: I. Scope of Services The Firm shall to the best of its ability and skill, perform services to analyze the top sales/use taxpayers of the City to estimate what affect Proposed Rule 3.334 as of date of this Agreement has on City sales/use tax collections. In addition, the Firm will estimate the affect of complete destination sales/use tax sourcing would have on the City. Top sales/use taxpayers will be based on the current City sales/use confidentiality report provided the City by the Comptroller. Top sales/use taxpayers are those taxpayers that represent at least fifty percent (50%) of the City sales tax collections or the largest 100 sales/use taxpayers by amount of sales/use tax that is reported to the City, which every group has the fewest members. This analysis of changes to City taxes for Proposed Rule 3.334 and complete destination sales/use tax sourcing will be shared with the City electronically. A spreadsheet will be providing documenting the Analysis findings, and basis for those findings. A Power Point presentation will provide charts and graphs presenting the spreadsheet findings visually. Collectively, these deliverables are referred to as Final Reports. Firm services do not result in any opinion, attestation, or other form of assurance with respect to the Client's transactional tax reporting or any other financial reporting functions of the Client. The procedures employed by this review do not constitute an examination or a review per General Accepted Auditing Standards. Neither does this review constitute a review of internal controls over any Client financial reporting function. The review is not limited nor directed towards the discovery of fraud, illegal acts, or material exceptions. The firm is not a public accounting firm. II. Fees and Billings Firm fees are estimated to be $10,000. Firm fees are due and payable upon the providing the Final Reports. If the City requests for Firm services beyond the Final Reports, such services will be based upon the Firms standard hourly rate of $250 per hour plus any out-of- pocket expenses. Such Firms Fees are due and payable monthly as billed. III. Responsibilities of the Firm Firm services will be performed based upon the information provided by the Client, and tax authorities. In addition, services will be performed in consideration of applicable tax laws, regulations and associated interpretations relative to the appropriate jurisdiction as of the date the services are provided. Tax laws and regulations are subject to change at any time, and such changes may be retroactive C:hll- 2mo-ouif Page 1 in effect and may be applicable to advice given or other services rendered before their effective dates. The Firm does not assume responsibility for such changes occurring after the date we have completed our services. With regards to the services provided under the terms of this agreement, the Firm will discuss with the CIient any positions that the Firm believes may subject the CIient to potential tax liabilities. The Firm is not held responsible for determining these liabilities, nor is the Firm responsible for any liabilities assessed against the Client as the result of the Client's failure to provide all relevant information relative to the issue under consultation. Any such liabilities are disregarded for determining fees. IV. Engagement Limitations/Termination In the event the Firm discovers activities or practices of the Client that the Firm deems inappropriate or that would prevent the project from being completed, or should the Client fail to provide the Firm with adequate and accurate information or the requisite assistance to allow for the proper completion of this project, the Firm reserves the right to resign from the engagement prior to the completion of the work. In such an event, the Client agrees to be responsible for all professional fees and expenses incurred prior to the resignation under the Fee terms described in this agreement. At any point during the project, the Firm has the right to terminate the services covered by this agreement by providing written notice to the Client of such termination. If such an election is made at the Firm's sole discretion, and not as a result of the Client or its Prospect activities stated above, the Finn's fees will be limited to the Firm actions prior to its termination of the project. The Firm is not restricted by anything in this agreement from providing services for other clients. The Client reserves the right to terminate the services covered by this agreement at any time by providing the Firm written notice of such intentions. The CIient is responsible to pay Firm Fees incurred by Firm prior to Firm's receipt of written notice of termination. The Firm makes no other representation or warranty regarding either the services to be provided or any deliverables; in particular, and without limitation of the foregoing, any express or implied warranties of fitness for a particular purpose, merchantability, warranties arising by custom or usage in the profession, and warranties arising by operation of law are expressly disclaimed. Only in the event the Firm is grossly negligent or acted willfully or fraudulently, shall the Firm be liable to the Client or any related parties, for any amounts in excess of the total professional fee paid by CIient to Firm under this agreement. V. Effective Date/Performance Period This Agreement shall terminate one year from the effective date indicated below. Page 1 VI. Indemnification Clause The Firm hereby waives any and all claims, release, defend, indemnify, and hold harmless the Client, its Council, Officers, employees, and agents from and against all liability, cause of action, claims, costs, damages, demands, expenses, fines, judgments, losses, penalties or suits, caused by or resulting from the negligence, intentional tort, intellectual property infringement or failure to pay a subcontractor or supplier committed by the Firm, its agent, its consultant under contract, or any other entity over which the Firm exercises control subject to the limitations in Texas Local Government Code § 271.904 and Texas Civil Practice and Remedies Code § 130.002 (B). Indemnified items shall include reasonable attorney's fees and costs, court costs, and settlement costs in proportion to the Firms liability. VII. Non -Disclosure Requirements In the performance of this Agreement, Client and Firm may not disclose technical, financial, or other information, material or data either via oral, written, or any other form, either electronic or otherwise, which is considered confidential and proprietary (Confidential Information). Confidential Information includes all information obtained from the Client, the tax authorities except information available under the Public Information Act. Confidential Information does not include any information known to the receiving party prior to the Agreement, or information that is available to the public under Texas' Open Records Act, or information published and available to the general public regardless of source. Unless otherwise agreed, the receiving party agrees not to disclose Confidential Information; will use the same degree of care and diligence to protect and secure Confidential Information as it uses for its own information; and will not copy or reproduce the Confidential Information except in the performance of the services described in this Agreement. The receiving party may disclose such Confidential Information to its associates, affiliates, consultants, and agents necessary to perform the Agreement's services. In the event either Client, or the Firm is required by law, rule, regulation or lawful order to disclose Confidential Information, the disclosing party agrees to notify the other party immediately to allow the other party to take steps it deems necessary to protect its Confidential Information. Both Client and Firm acknowledge and agree that the disclosing party owns all rights, interest, and title to the Confidential Information. Both Client and Firm agree that the unauthorized disclosure of the Confidential Information will cause irreparable harm to the other party. As a result of the unique nature of the Confidential Information, in addition to all other available remedies, the disclosing party shall be entitled to seek injunction and other extraordinary relief in a court of competent jurisdiction in order to enforce the receiving parry's obligations under this Agreement. Page 3 VIII. Severability If any of the terms, provisions, covenants, conditions or any other part of this Agreement are for any reason held to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants, conditions or any other part of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The clauses regarding liability limitations and indemnification shall survive any termination of this agreement. This agreement will be governed by the laws of the State of Texas. Effective date: IVV-V11\ 2020; A 5 1 ity's Authoriz ignature Q. &Iiii R.L. t, r Printed Name/Titlej j V Page 4 City of Round Rock IRCOaUN RocK Agenda Item Summary Agenda Number: Title: Consider executing a contract with TexasCityServices LLC to provide sales tax analysis services. Type: City Manager Item Governing Body: City Manager Approval Agenda Date: 3/6/2020 Dept Director: Susan Morgan, CFO Cost: $1 0,000.00 Indexes: General Fund Attachments: Signed Contract 03.02.20 Department: Finance Department Text of Legislative File CM-2020-068 The attached contract provides the scope of services which includes estimating the impact that the proposed Comptroller sales tax rule changes may have on City sales tax revenues. This is a one time contract that will also provide valuable insights into the remaining sales tax base and better understanding of the City's vulnerability as rules may change in the future. Cosf: $10,000.00 Source of Funds: General Fund - Fiscal Support City of Round Rock Page i Printed on 1AJ12020