1993-155-Execute Amendment No.1 To Contract With Municipal Response Consultants To Add Property Tax Audit ServicesRESOLUTION 1993 -155
RESOLUTION OF THE TOWN OF LOS GATOS
AUTHORIZING TOWN MANAGER TO EXECUTE
AMENDMENT NO.1 TO CONTRACT
WITH MUNICIPAL RESOURCE CONSULTANTS
TO ADD PROPERTY TAX AUDIT SERVICES
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa
Clara, State of California, that the Town of Los Gatos amend contract (attached) with
Municipal Resource Consultant Contract by adding property tax review services, and that
the Town Manager is authorized, and is hereby directed, to execute said Amendment No.
1 to the Contract in the name and on behalf of the Town of Los Gatos.
PASSED AND ADOPTED at a regular meeting of the Town Council of the
Town of Los Gatos, California, held on the 1st day of November, 1993 by the following
vote:
COUNCIL MEMBERS:
AYES: Randy Attaway, Steven Blanton, Linda Lubeck, Patrick O'Laughlin
Mayor Joanne Benjamin
NAYES: None
ABSENT: None
ABSTAIN: None
SIGNED:
OR OFT T N OF LOS GATOS
S GATOS, CALIF NIA
ATTEST:
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AMENDMENT NO. 1 TO CONSULTANT SERVICES AGREEMENT
BETWEEN THE TOWN OF LOS GATOS AND
MUNICIPAL RESOURCE CONSULTANTS
This Amendment No. 1 to the Consultant Services Agreement between the
Town of Los Gatos and Municipal Resource Consultants dated December 4, 1989
(hereinafter 1989 Agreement), is made and entered into this day of
, 1993, as follows:
1. Addition of Property Tax Services. In addition to the services provided
under the 1989 Agreement, Consultant shall provide to Town the services described in
Exhibit C to this Amendment No. 1. Consultant shall provide these services at the time,
place, and in the manner specified in Exhibit C to this Amendment No. 1. Consultant shall
not be compensated for any services outside the scope of Exhibit A to the 1989 Agreement
or of Exhibit C to this Amendment No. 1. Consultant further acknowledges that the services
to be provided under this Amendment No. 1 are to benefit both the Town and the Town
of Los Gatos Redevelopment Agency [hereinafter Agency], and that by executing this
Amendment No. 1, Consultant is obligating itself to provide the same standard of care and
service regarding property tax issues affecting the Agency as it does for the Town.
2. Payment. Town shall pay Consultant for services rendered under Exhibit C
to this Amendment No. 1 at the times and in the manner set forth in Exhibit C to this
Amendment No. 1. The payments specified in Exhibit C to this Amendment No. 1 shall
be the only payments to be made to Consultant for services rendered pursuant to Exhibit
A to this Amendment No. 1, unless the Town gives prior written approval for additional
compensation for additional service. Consultant shall submit all billings for services
rendered pursuant to Exhibit A to this Amendment No. 1 in the manner specified in that
Exhibit.
3. Effect of 1989 Agreement. Except as explicitly amended in this Amendment
No. 1, all other terms, conditions, and exhibits of the 1989 Agreement shall remain
unamended and in full force and effect.
4. Exhibits. All Exhibits referred to herein are attached hereto and are by this
reference incorporated herein.
TOWN OF LOS GATOS
Title:
MUNICIPAL RESOURCE CONSULTANTS
PARTIED. JOHN T. AUSTW, INC.
By:
John T. Austin
Im
Date: September 23, 1993
EXHIBIT C
EXPANDED REVENUE ENHANCEMENT AUDIT SERVICE
Municipal Resource Consultants (MRC) hereby agrees to expand the revenue
enhancement and information services currently being provided to the Town of Los
Gatos (Town). 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 thev are
entitled due to administrative errors and omissions by revenue - generating
businesses and third -party intermediaries (such as the state, counties and utility
companies) responsible for collecting and remitting the revenue 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. Human fallibilitv,
fragmented responsibilities and employee turnover further compound the
problem.
Because there are time limitations on the Town's ability to recover revenue it has
been deprived of, it behooves the Town 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 Town in
recovering all of the revenue to which it is entitled from Property Tax and RDA
Tax Increment.
MRC's revenue enhancement audit 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 captured by
the Town /Agency.
3. PROCEDURES
In general, MRC shall:
❑ Meet with Town's designated staff to review service objectives, scope,
workplan schedule, public relations and logistical matters. MRC will also
establish an appropriate liaison with the Town's coordinator and logical
checkpoints for reviewing progress
❑ Review applicable provisions of the Town's municipal code and
ordinances
❑ Physically canvass the revenue generating elements of the Town's
economic base, such as the land parcels, major buildings, commercial,
industrial, institutional and governmental users
❑ Represent the Town for purposes of examining records pertaining to
property tax and RDA tax increment to identify and confirm any
errors/ omissions that are resulting in deficient payment to the Town
❑ 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 Town official(s) as necessary to review our findings
and recommendations
❑ Provide additional assistance as necessary to support the Town in
recovering and preventing tax deficiencies
Specifically, MRC shall
❑ Establish a comprehensive inventory of every parcel located within the
Town and each project within the Redevelopment Agency project areas,
including the database elements needed to facilitate a comparison
analysis with County secured and unsecured taxable values and the
California State Board of Equalization taxable assessed values
❑ Review County assessment practices, systems and procedures for
determining property tax value, calculating and allocating property tax
revenue to the Town and its Redevelopment Agency under AB8 and
Community Redevelopment Law Section 33670
❑ Conduct a review and analysis of the RDA local secured and unsecured
valuations, tax rate area and parcel misplacements /omissions, incorrect
tax rate levies, late assessments, tax roll adjustments and supplemental
roll placements
❑ Notify MRC within 10 days following receipt by the Town /Agency of
payments resulting from MRC's audit service. Upon being notified of
receipt of payment(s), MRC will then invoice the Town /Agency. Earned
compensation is due and payable upon receipt of invoice.
All expenses incurred by MRC in providing the revenue enhancement audit
service will be absorbed by MRC. These expenses include such items as
employee salaries and benefits, insurance airfare, auto rentals, meals lodging,
computer processing, clerical, communications (e.g., personal meetings,
telephone, mail, etc.), photocopying, overhead and miscellaneous out -of- pocket
expenses for consumable supplies and research materials such as maps,
directories, etc.
4. TIMING & REPORTING
MRC shall commence the revenue enhancement audits within 10 working days
of authorization (unless instructed otherwise by the Town) with the objective of
delivering the initial audit reports within 90 to 120 working days. Thereafter,
MRC shall provide the Town with audit progress reports to include, but not be
limited to, the following:
❑ Status of work in progress, including copies of reports addressing
errors/ omissions with assessor's identification or parcel number,
individuals contacted, date(s) of contact, reason(s) for error/ omission and
recommended corrective procedure
❑ Actual revenue produced for the Town by MRC's service on a quarterly
and cumulative basis
❑ Projected revenue forthcoming to the Town as a result of MRC's audit
service, specified according to source, timing and on -time versus ongoing
❑ Alphabetical listing of all errors /omissions detected for the Town by
MRC including, for each, the account number, correction status, payments
amount received by the Town, period to which payment is related and
payment type (e.g. reallocation, deficiency assessment, etc.)
5. COMPENSATION & EXPENSES
To make the service self - funding for the Town/ Redevelopment Agencv, MRC's
compensation for providing the revenue enhancement audit service shall be
entirely predicated and contingent upon the audit(s) producing new revenue
that would not otherwise have been realized by the Town /Agency.
Under this arrangement, the Town /Agency agrees to pay MRC an amount equal
to 25% of the deficiency recoveries from eligible prior periods (plus associated
charges for penalties and interest). When MRC audits result in the detection and
correction of errors/ omissions that the Town /Agency and MRC mutually agree
will produce ongoing (rather than one -time) benefits to the Town /Agencv,
MRC's compensation shall be 25% of the incremental revenue realized by the
Town /Agency during the first twelve consecutive quarters following correction.
In this regard, the Town Agency agrees to:
❑ Notify the County (on Two or MRC letterhead) 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
❑ Notify MRC within 10 days following receipt by the Town of payments
resulting from MRC's audit service. Upon being notified of receipt of
payment (s), MRC will then invoice the Town. Earned compensation is
due and payable upon receipt of invoice.
All expenses incurred by MRC in providing the revenue enhancement audit
service are absorbed by MRC. These expenses include items such as employee
salaries and benefits, insurance, airfare, auto rentals, meals, lodging,
keypunching, computer processing, clerical, communications (e.g. personal
meetings, telephone, mail, etc.) photocopying, overhead and miscellaneous out -
of- pockets for consumable supplies and research materials such as maps,
directories, etc.
6. QUALIFICATIONS
Since its inception in 1978, Municipal Resource Consultants (MRC) has
specialized in providing innovative revenue enhancement audit services to
California cities. MRC is the only firm in the United States offering these
proprietary revenue enhancement audit services that encompass all sources of
municipal tax revenue.
MRC's revenue enhancement audit services are complemented by geobased
management information programs and consulting in areas such as strategic
planning, economic development and redevelopment.
MRC pioneered the concept of revenue enhancement consulting with its sales tax
services for California cities in 1978. Since then, MRC has established a track
record of consistently impressive results by providing ongoing revenue
enhancement services to more than 125 California cities. MRC's audits have
recovered more than $100 million for its client cities.
MRC's revenue enhancement services are designed to provide cities with an
ongoing, readily measurable economic return that is many times greater than the
amount invested in the service.
On behalf of the cities served, MRC's revenue enhancement audit findings and
recommendations have been validated and accepted by third party
intermediaries (including the State Board of Equalization, county assessors and
major utility companies) throughout California, in addition to thousands of
corporate tax departments throughout the United States.
MRC has a staff of 60 consultants serving California cities from six in -state office
locations.
6. PROJECT MANAGEMENT TEAM
MRC's project management team for the revenue enhancement audit services
consists of the following personnel:
John Austin & Allen Charkow - Project Co- Directors
As founders of MRC and project co- directors, John and Allen are responsible for
the overall quality control and timeliness of the project. They are also
responsible for making MRC's resources available to the project and assisting in
the technical direction, management and liaison activities.
John is responsible for the overall design and provision of MRC's revenue
enhancement services and client relations. In this capacity, he interfaces with
third -party intermediaries (such as the state, counties and public utility
companies) and corporate taxpayers on behalf of client cities. John has been an
economic development and tax consultant to California municipalities for more
than 20 years, principally focused on the enhancement of sales, use and property
tax revenue. He received a BS Degree in Business Economics and Marketing
from the University of Southern California.
Allen has overall responsibility for the design and provision of the firm's data
processing and geobased information systems for auditing, monitoring and
analyzing revenue sources. Allen pioneered computerized information systems
for revenue auditing and analysis on behalf of California cities. Allen was in
municipal finance for more than "17 years, "14 of which were in the capacity of
Director and one year as Assistant Town Manager. He received a BA in
Business Management from Fresno State and an MBA from the University of
Santa Clara.
Jeff Mikles - Administrative Liaison
Jeff is responsible for managing client relations with MRC's Northern California
clients. He has over 22 years of management and consulting experience in
public and private sector auditing, finance, administration, and operations
analysis. Before joining MRC, he was principal of an innovative cost reduction
firm that specialized in reducing utility and energy costs. Jeff has also served as
Assistant Town Auditor for a major California Town, Senior Management
Auditor for the California Auditor General's Office, and Senior Consultant for an
international accounting firm.
Moreover, Jeff has been an international and domestic Personnel Administration
and Data Manager for a Fortune 100 firm. Jeff has a BS degree from Michigan
State University and an MA degree from Arizona State University.
Gary Tones - Property Tax and RDA Tax Increment
Gary has overall responsibility for MRC's property tax consulting practice. In
this capacity, Gary and his staff conduct deficiency audits for cities and their
redevelopment agencies to detect, document and recover previously unrealized
property taxes and tax increments. Prior to joining MRC, Gary was a Principal
with the firm of Katz Hollis in charge of fiscal and administrative management
consulting services to redevelopment and other public agencies throughout
California and other western states. Gary has been analyzing property tax
assessments and tax allocations for public agencies throughout California for
more than 20 years. Gary received his BA degree from CSU, Fresno and
completed graduate courses at UCLA.
Joe Vinatieri - Legal Analvsis
Joe is a partner in the Whittier law firm of Bewley, Lassleben & Miller where he
specializes in matters of California state and local taxation, including sales and
use tax, franchise/ income tax and property tax. He is former deputy to the
Honorable Ernest J. Dronenburg, Jr., and a member of the California State Board
of Equalization. Joe received his BA degree from Westminster College and his
JD degree from the University of San Diego. He is Chairman of the State and
Local Subcommittee of the Tax Section of the Los Angeles County Bar
Association and member of the Tax Section of the California State Bar. He is also
a member of the Institute of Property Tax for which he has spoken nationally.