INTRODUCTION BACKGROUND

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1 INTRODUCTION The City of South San Francisco (hereinafter referred to as the City ) is requesting proposals from a qualified firm, to conduct an audit of the financial records of thirty (30) hotels and three (3) parking facilities in the City of South San Francisco to ensure proper reporting of revenues to the City. The term is expected to be for three (3) years with one-year options to renew. The audit shall be made in accordance with South San Francisco Municipal Code Section 4.20 Transient Occupancy Tax (Attachment A) and Section 4.22 Commercial Parking Tax (Attachment B). Transient Occupancy Tax (TOT) represents the City s third largest source of revenue. Fiscal Year TOT revenue was $11.2 million, which was 14.3% of Total General Fund Revenues. Commercial Parking Tax, which trends along the same seasonal and economic cycles as Transient Occupancy Tax, totaled $2.7 million in revenue for FY The proposals submitted in response to this RFP will be used as the basis for selecting a consultant to perform the Scope of Services. The proposals will be evaluated and ranked according to the criteria provided in Evaluation Criteria in this RFP. This RFP is not an offer by the City to contract with a selected vendor responding to this RFP. The City reserves the right to reject any and all responses, to waive minor irregularities in any proposal, to negotiate with qualified sources, or cancel this request in total or in part. The City also reserves the right to amend this RFP as necessary. All materials submitted to the City in response to this RFP shall remain the property of the City. The responder must bear the costs of preparing and submitting their proposals and the City will not reimburse those costs. BACKGROUND South San Francisco, California "The Industrial City" was incorporated on September 19, It has a population of approximately 66,000 and a land area of 9.14 square miles. South San Francisco is located approximately 8 miles south of Downtown San Francisco and is adjacent to the northern border of the San Francisco Airport and San Bruno, south of Daly City, Colma, and Brisbane, and east of Pacifica. The City of South San Francisco is a general law city, which operates under the council/manager form of government with a General Fund budget of over $84 million and a total budget of over $135 million for Fiscal Year South San Francisco has benefited from the substantial growth of the region in the last twenty years, including significant expansion of biotechnical firms in the area east of Highway 101, the construction of a BART Station at the northern end of the city, and a BART station just outside the southern city limit in the City of San Bruno. Due to activity at the South San Francisco Conference Center as well as the City s proximity to the San Francisco International Airport, hotel occupancy has increased significantly.

2 PROCESS TIMELINE This request for proposal will be governed by the following schedule: Release of RFP August 17, 2015 Deadline for Written Questions August 31, 2015 Responses to Questions Posted on Web September 4, 2015 Proposals Due September 18, 2015 Interviews (if held) Week of October 12, 2015 Approval of Contract October 28, 2015 All dates are subject to change at the discretion of the City. SCOPE OF WORK The City currently has 30 hotels and 3 parking facilities (See Attachment C for list). Transient Occupancy Taxes ( TOT ) totaled $11.2 million, while Commercial Parking Tax totaled $2.7 million in Fiscal Year In previous years, TOT audits were performed by internal staff members. The City wishes to appoint external auditors to audit all hotels and parking facilities for Fiscal Years , and Upon completion, continuous audits will be conducted on 6 to 11 hotels/parking facilities per year, for each future fiscal year, for 3 years, on a rotating basis. Audit Services Requirement The following is a summary of the TOT scope of audit for the years ending June 30, 2013 through 2017: The City will coordinate with the auditor for finalizing the audit schedule. Selection of the specific entities to be audited each project will be the responsibility of the City. In the event that extraordinary circumstances warrant more intensive and detailed services beyond those in the contractual agreement, the firm shall provide in writing and in advance the reasons for the additional services together with the firm s estimation of cost. Audit procedures for each hotel/parking facility as agreed upon by staff of the City of South San Francisco will be as follows:

3 1. Review the City Municipal Code 4.20 Transient Occupancy Tax and 4.22 Commercial Parking Tax and resolutions related to the transient occupancy tax and commercial parking tax. 2. Verify the mathematical accuracy and timeliness of transient occupancy reports and parking tax reports filed with the City for fiscal years , and Trace the gross revenues reported on the transient occupancy tax returns and parking tax filings prepared by the hotel/parking facility to gross revenue recorded in the hotel/parking facility s accounting records and verify that these were in accordance with the City s ordinance. 4. Select a sample of rental transactions during the review period and for each transaction selected, verify tax computations and trace the amounts of rental revenues and transient occupancy tax and parking tax collected to the books and records of the hotel. 5. Review the internal control procedures of the hotel/parking facility to determine the following: a. How gross rents and uncollected rents and/or parking revenue were accounted for and reported to the City. b. What procedures were in place to identify transient and non-transient guest(s). c. How exemptions, including complimentary rooms, were documented and reported to the City. 6. Review the supporting documentation, on a sample basis, for exemptions claimed on the transient occupancy tax returns. 7. Perform additional procedures that the City considers necessary to verify the reasonableness of reported revenues of the hotel/parking facility operator. Report Deliverables 1. Contractor shall submit a draft audit report for each hotel/parking facility. Reports are to be submitted to the Finance Director 40 days after the completion of fieldwork. The selected consultant shall finalize interim reports as directed by the Director of Finance or their designee. 2. Two-sided copies of the draft final report shall be submitted to the Director of Finance or their designee within 20 days after review of the draft report(s). The City reserves the right to choose or approve which hotels are scheduled to be audited each year. Finance staff will provide adequate cooperation and support during the audits, including pulling and refiling of TOT and parking tax-related supporting documents. All working papers and reports are to be retained at the auditors expense for a minimum of five years. The selected audit firm will be responsible for making working papers available to the City upon request.

4 PROPOSAL FORMAT GUIDELINES Interested entities or consultants are to provide the City of South San Francisco with a thorough proposal using the following guidelines: Each proposal will adhere to the following order and content of sections. Proposal should be straightforward, concise and provide layman explanations of technical terms that are used. Emphasis should be on conforming to the RFP instructions, responding to the RFP requirements, and providing a complete and clear description of the offer. Proposals which appear unrealistic in terms of technical commitments, lack of technical competence or are indicative of failure to comprehend the complexity and risk of this contract may be rejected. The following proposal sections are to be included in the Proposer s response: 1. Proposer Background information 2. Proposal Summary 3. Qualifications for facilitating the scope of work, including 3 or more references from clients for whom Contractor performed similar services. Information provided shall include: a. Client Name b. Project Description c. Project start and end dates d. Client project manager name, telephone number and address 4. Project Experience: Narrative description, accompanied by examples of reports or other related deliverables of projects similar in scope to the one covered by this RFP. 5. Staffing a. Include description and chart of organizational structure, other business affiliations, number and location of offices, and total number of professional staff. b. If sole proprietor, description of business affiliations. 6. Proposed Methodology, to include: a. Implementation plan b. Detailed project schedule, including tasks and deliverables, and their respective timelines, as well as an overall completion timeline c. Detailed descriptions of tasks required from City Staff 7. Fee Proposal and cost estimates in a separate sealed envelope

5 PROCESS FOR SUBMITTING PROPOSALS Proposals are required in two formats: five (5) printed copies and one (1) electronic copy by . Complete written proposals and electronic ( ed) copies must be received no later than 4:00 p.m. (PST) on September 18, 2015 to the address below. Written proposals must be must be submitted in marked sealed envelopes. Proposals will not be accepted after this deadline. Late proposals will not be accepted, and will be returned unopened, regardless of postmark. Prospective Proposers are responsible for having proposals deposited on time at the place specified and assume all risk of late delivery, including any delay in the mail or handling of the mail by the U.S. Postal Service or City employees. Faxed proposals will not be accepted. City of South San Francisco Office of the City Clerk 400 Grand Ave. South San Francisco, CA RE: TOT & Parking Tax Audit Services The electronic copy of the proposal may be sent to: INQUIRIES Questions about this RFP must be directed in writing by August 31, 2015, to: Richard Lee, Director of Finance The City will answer all written questions received within the prescribed deadline by no later than September 4, From the date that this RFP is issued until a firm or entity is selected and the selection is announced, firms or public entities are not allowed to communicate outside the process set forth in this RFP with any City employee other than the contracting officer listed above regarding this RFP. The City reserves the right to reject any proposal for violation of this provision. No questions other than written will be accepted, and no response other than written will be binding upon the City. EVALUATION PROCESS & CRITERIA

6 The Auditor will be selected based on professional qualifications necessary for the satisfactory performance of the services required and demonstrated competence that includes a proven track record of performing tax audits. The skill and ability of the entity performing the services is a key component of the selection criteria. Cost will be only one factor in determining the selection, and as such, the contract might not be awarded to the lowest responsible Proposer. The City will undertake the following evaluation process: 1. The City will review and evaluate all submitted documents received in response to the RFP. 2. Submittals will be reviewed for responsiveness and evaluated based on the following factors in the table below. Staff will also evaluate the Proposer s ability to work with the City s staff and consultants. Selection Criteria Available Points Qualifications & Experience 35 Responsiveness to RFP Guidelines 25 Quality of Proposed Methodology 25 Cost 15 Total After the submittals are evaluated and ranked, the City, at its sole discretion, may elect to interview one or more respondents. Please note that respondents may be asked to submit additional documentation. In addition, the City reserves the right to select a proposal without conducting interviews. 4. If a commitment is made, it will be to the most qualified respondent with whom City is able to successfully negotiate the compensation and terms and conditions of any and all agreements. 5. Final selection of an Auditor, terms and conditions of any and all agreements, and authority to proceed with these services, shall be at the sole discretion of the City. 6. Attachment D is the City s standard consulting services agreement. Consultants interested in proposing on this RFP should be prepared to enter into the agreement under the standard terms and should be able to provide the required insurance. If the City is unable to negotiate a satisfactory agreement, with terms and conditions the City determines to be fair and reasonable, the City may then commence negotiations with the next most qualified firm in sequence, until an agreement is reached or determination is made to reject all submittals. GENERAL CONDITIONS

7 Consultants are advised to become familiar with all conditions, instructions, and specifications of this RFP. By submitting a proposal, Consultant represents and warrants that it has thoroughly examined and is familiar with work required under this RFP, that Consultant has conducted such additional investigation as it deems necessary and convenient, that Consultant is capable of providing the services requested by the City in a manner that meets the City s objectives and specifications as outlined in this RFP, and that Consultant has reviewed and inspected all materials submitted in response to this RFP. Once the consultant has been selected, a failure to have read the conditions, instructions, and specifications herein shall not be cause to alter the contract or for Consultant to request additional compensation. Non-Discrimination Requirement By submitting a proposal, the Consultant represents that it and its subsidiaries do not and will not discriminate against any employee or applicant for employment on the basis of race, religion, sex, color, national origin, sexual orientation, ancestry, marital status, physical condition, pregnancy or pregnancyrelated conditions, political affiliations or opinion, age, or medical condition. CONDITIONS OF PROPOSAL ACCEPTANCE This RFP does not commit the City to award a contract, to pay any costs incurred in the preparation of a proposal for this RFP, or to procure or contract for any services. The City reserves the right to waive any irregularities or informalities contained within this RFP, and/or reject any or all proposals received as a result of this request; negotiate with any qualified source or to cancel the RFP in part or whole. All proposals and material submitted will become the property of the City of South San Francisco and will not be deemed confidential or proprietary. The City of South San Francisco reserves the right to award in whole or in part, by item or group of items, by section or geographic area, when such action serves the best interests of the City. The City and Contractor may agree to add additional areas to the contract (Attachment D) by mutual agreement at a later date. The City may elect to stop work at any time in the contract and will pay for work completed to that point on a time and material basis. Attachments: Attachment A City of South San Francisco Municipal Code 4.20 Transient Occupancy Tax Attachment B City of South San Francisco Municipal Code 4.22 Commercial Parking Tax Attachment C List of hotels and parking facilities in South San Francisco Attachment D City of South San Francisco Standard Consulting Agreement

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