HomeMy WebLinkAbout1993-02-09; City Council; 12067; AGREEMENT WITH MUNICIPAL RESOURCE CONSULTANTS FOR SALES TAX AUDIT AND INFORMATION SERVICESCw OF CARLSBAD - AGWA BILL e-!!-2y .t i-r i
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AB # );;I:OcP'? TITLE:
MTG, 02/09/93 AGREEMENT WITH MUNICIPAL RESOURCE CONSULTANTS
D€PJ, FIN FOR SALES TAX AUDIT AND INFORMATION SERVICES
DEPT. HI
CITY AT1
CITY MGI
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RECOMMENDED ACTION:
Adopt Resolution No. 9 3 -3 [ authorizing the Mayor to enter into an agreement with
Municipal Resource Consultants (MRC) to audit the City's Sales Tax and to provide MRC's
Sales Tax Analysis and Reporting System (STARS).
Adopt Resolution No. 9 3 -J2 appointing MRC as the City's authorized representative to
examine State Sales and Use Tax records of the State Board of Equalization.
ITEM EXPLANATION:
h Ltegral part of mahta-g the City's fiscal integrity is being certain that we receive all
tax revenue to which we are entitled. While we do devote some staff effort to auditing
Sales Tax we feel that is it appropriate to be sure we are doing all we can by supplementing
these efforts.
In furtherance of this goal, staff solicited proposals from and interviewed the two firms
which are authorized by the State Board of Equalization, the agency which governs the
collection and allocation of Sales and Use Tax, to conduct such audits. Based on those
interviews and verification of the credentials and success of the firms, staff recommends the
selection of MRC to provide these services.
Municipal Resource Consultants has been assisting cities by auditing sales tax revenue since
1978, and, during that time has been successful in recovering over $80 million for its
clients. MRC has over 11 5 client cities in California and employs over 55 consultants, and
provides similar services to San Diego, Chula Vista, Oceanside, La Mesa and Escondido in
San Diego county.
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Most sales tax misallocation is not the result of errors on the part of the State Board of
Equalization. In fact, their allocation of retail sales is over 99% accurate. There are,
however, many instances when business to business sales are allocated to state or county
pools based on the address of the buyer of the goods or other factors, rather than the seller.
This could result in Carlsbad losing significant revenue, and these are the transactions which
are most difficult to correct.
It is important to point out that this sales tax audit work does not result in any increase in
taxes to our local businesses. It merely assures that the taxes they are already collecting and
remitting to the Board of Equalization are correctly allocated to Carlsbad.
MRC will also provide the City with a quarterly Sales Tax Analysis and Reporting Systerr
(STARS) which allows us to analyze our receipts to make revenue forecasting and fisca
impact analysis easier and more valid.
These audits involve no additional cost to the City. MRC is only paid if and when the]
recover sufficient taxes to cover their fees.
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1. Page Two of Agenda Bill No. ) a! 0 b /2
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FISCAL IMPACT:
MRC's fees for Sales Tax audit are 25% of all recoveries from previous quarters and the first
six quarters following correction of the misallocation and confirmation of corrections by the
State Board of Equalization. The quarterly fee for STARS (the reporting system) is $1,000.
These fees cover all of MRC's expenses and are only payable from increased City revenue
generated by MRC's efforts.
Exhibits:
1. Resolution No. 9 3 - 3 I authorizing the Mayor to enter into an agreement with
Municipal Resource Consultants (MRC) to audit the City's Sales Tax and to provide
MRC's Sales Tax Analysis and Reporting System (STARS).
2. Resolution No. 9 3 *32. appointing MRC as the City's authorized representative
to examine State Sales and Use Tax records of the State Board of Equalization.
3. Agreement between the City of Carlsbad and Municipal Resource Consultants (MRC)
to audit the City's Sales Tax and to provide MRCs Sales Tax Analysis and Reporting
System (STARS).
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RESOLUTION NO. 93 - 3 1
A RESOLUTION OF THE CITY OF CARLSBAD CITY
COUNCIL AUTHORIZING THE MAYOR TO ENTER
INTO AN AGREEMENT WITH MUNICIPAL RESOURCE
CONSULTANTS
WHEREAS, pursuant to California Revenue and Taxation Code
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Section 7200, et seq., the City of Carlsbad has adopted a sales and use tax
ordinance which imposes a tax and provides a measure therefore that can be
administered and collected by the State Board of Equalization along the same
10 // and existing statutory and administrative procedures followed by the State
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Sales and Use Taxes; and 12
Board of Equalization in administering and collecting the California State
13 WHEREAS, pursuant to California Revenue and Taxation Code
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Section 7056, the City of Carlsbad, by resolution, may designate any officer,
employee or any other person to examine all of the sales and use tax records
of the Board pertaining to sales and use taxes collected for the City; and
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20 I j such audits; and
WHEREAS, staff has solicited proposals from and interviewed the
19 j two firms which are authorized by the State Board of Equalization to conduct
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offered by Municipal Resource Consultants;
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WHEREAS, staff believes our needs can best be met by the services
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NOW, THEREFORE, BE IT RECOLVED by the City Cbuiid bf th&
City of Carlsbad, California, as follows:
1. That the above recitations are true and correct,
2. That the Mayor is hereby authorized to execute the
attached Agreement between the City of Carlsbad and Municipal Resource
Consultants, a partnership of John T. Austin, Inc. and Allen W. Charkow, Inc.
to provide sales tax audit and information services.
PASSED, APPROVED AND ADOPTED at a regular
meeting of the City Council on the 9th day of FEBRUARY , 1993, by the
following vote, to wit:
AYES: Council Members Lewis, Stanton, Kulchin, Finnila
NOES: None
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ABSENT: Council Member Nygaard JlJ[& d /
CLAUDE A. LEWIS, Mayor
ATTEST:
MRbJ
ALETHA L. RAUTENKRANZ, City Clerk (SEAL)
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RESOLUTION NO. 93-32
A RESOLUTION OF THE CITY OF CARLSBAD CITY
COUNCIL DESIGNATING MUNICIPAL RESOURCE
CONSULTANTS AS THE AUTHORIZED CITY REPRE-
SENTATMZ TO EXAMINE SALES AND TAX USE
RECORDS
WHEREAS, pursuant to California Revenue and Taxation Code
Section 7200, et seq., the City of Carlsbad has adopted a sales and use tax
ordinance which imposes a tax and provides a measure therefore that can be
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and existing statutory and administrative procedures followed by the State 11
administered and collected by the State Board of Equalization along the same
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Board of Equalization in administering and collecting the California State
Sales and Use Taxes; and
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15 iI WHEREAS, pursuant to California Revenue and Taxation Code
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employee or any other person to examine all of the sales and use tax records
I Section 7056, the City of Carlsbad, by resolution, may designate any officer,
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20 I/ WHEREAS, the City of Carlsbad has entered into an agreement
li for sales tax audit and information services with the firm of Municipal 21
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Resource Consultants, a partnership of John T. Austin, Inc. and Allen W.
Charkow, Inc., to designate Municipal Resource Consultants as the
authorized Consultant to examine such sales tax records maintained by the
Board on behalf of the City of Carlsbad; and 25 i
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WHEREAS, all legal prerequisites prior to the adoption of this
Resolution have occurred.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
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1. In all respects as set forth above, the City Council of the 5
City of Carlsbad, California, as follows, to wit:
6 City of Carlsbad hereby certifies to the State Board of Equalization that
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Municipal Resource Consultants is the designated representative of the City
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of Carlsbad to examine all of the sales and use tax records of the Board
pertaining to sales and use taxes collected by the Board on behalf of the City
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2. Pursuant to California Revenue and Taxation Section Code 12
of Carlsbad.
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Section 7056 (b), the Carlsbad City Council hereby certifies that Municipal
Resource Consultants, a partnership of John T. Austin, Inc. and Allen W.
Charkow, Inc. (hereinafter referred to as "Consultant") meets all of the
following conditions:
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1 b) . Consultant is required by that contract to disclose 20
i a) Consultant has an existing contract with the City to
19 ! examine sales tax records;
21 I1 infomation contained in, or derived from, those sales tax records only to an
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officer or employee of the City who is authorized by resolution to exafnine
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the information;
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c) Consultant is prohibited by the Contract from I
2 ll performing consulting services for a retailer during the term of the contract;
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retaining the information contained in, or derived from, those sales tax 5
d) Consultant is prohibited by the contract from
6 records after the contracts have expired.
7 ii 3. The City shall certify to the adoption of this Resolution.
PASSED, APPROVED AND ADOPTED at a regular meeting of the
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City Council on the 9th day of FEBRUARY , 1993, by the following vote,
to wit:
12 I/ AYES: Council Members Lewis, Stanton, Kulchin, Finnila
13 \I NOES: None I(
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ABSENT: Council Member Nygaa
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ATTEST:
ALETHA L. RAUTENKRANZ, City Clerk (SEAL)
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AGREEMENT BETWEEN THE CITY OF CARLSBAD
AND MUNICIPAL RESOURCE CONSULTANTS
TO PROVIDE SALES TAX AUDIT AND INFORMATION SERVICES
THIS AGREEMENTl made and entered into as of the 18th day of FEBRUARY
1993, by and between the CITY OF CARLSBAD, a municipal corporation, hereinafte
referred to as "City", and Municipal Resource Consultants, hereinafter referred to a!
"Consultant".
RECITALS
City requires the services of a Sales Tax Audit and Information Services consultar
to provide the necessary audit and information services for realization of revenu
recovery; and Consultant possesses the necessary skills and qualifications to provide th
services required by the City;
NOW, THEREFOREl in consideration of these recitals and the mutual covenanf
contained herein, City and Consultant agree as follows:
1. CONSULTANT'S OBLIGATIONS
The Consultant shall provide sales tax audit and information services to the City t
described in Exhibit "A'. Consultant shall provide said services at the time, place, and
the manner specified in Exhibit "A'. Consultant shall not be compensated for servicf
outside the scope of Exhibit "A".
2. CITY OBLIGATIONS
The City shall provide the Consultant with all pertinent records and information witt-
its possession that may be deemed necessary by the Consultant to meet its obligatic
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3. PROGRESS AND COMPLETION
The work under this contract will begin within ten (1 0) days after receipt of notification
to proceed by the City and continue according to the work plans as set forth in Section
I, D. of Exhibit A. for the audit work and Section 1I.D. for the information services.
Extensions of time may be granted if requested by the Consultant and agreed to in
writing by the Finance Director of the City of Carlsbad. The City will give allowance fol
documented and substantiated unforeseeable and unavoidable delays not caused by 2
lack of foresight on the part of the Consultant, or delays caused by City inaction or othel
agencies' lack of timely action.
4. FEES TO BE PAID TO CONSULTANT
. Compensation to the Consultant for providing the audit and for providing the audi.
and information services shall be entirely predicated and contingent upon thc
Consultant's audits producing new sales/use tax revenue that would not otherwise havl
been received by the City, further described as follows:
A. ALLOCATION AUDIT SERVICE
The Consultant's compensation for providing the allocation audit service is 259
of the new sales/use tax revenue received by the City as a result of th
Consultant detecting and correcting the related point-of-sale/use distributio
error, Said 25% applies to each correction for fund transfers (i.e., retroactiv
adjustments for eligible amounts improperly distributed in prior quarters) and tF
first six consecutive reporting quarters following completion of the audit by tt-
Consultant and confirmation of corrections by the State Board of Equalizatior
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" B. INFORMATION SERVICE
The Consultant shall provide the Sales Tay Inquiry Sygtem and STARS reports
for $1,000 per quarter, payable only after the City has received the Sales Tax
Inquiry System, STARS report(s) and sufficient funds to cover the charges from
the City's share of new tax revenue produced from the Consultant's audil
service.
C. EXPENSES
All expenses incurred by the Consultant in providing the sales tax audit anc
information services shall be absorbed by the Consultant. These expenses shal
include items such as employee salaries and benefits, insurance, airfare, autc
rentals, meals, lodging, keypunching, computer processing, clerica
communications (e.g. personal meetings, telephone, mail, etc.), photocopyinc
overhead and miscellaneous out-of-pockets for consumable supplies anc
research materials such as maps, directories, etc.. No other compensation fc
services will be allowed except those items covered by supplemental agreemeni
per Paragraph 8, "Changes in Work."
5. DURATION OF CONTRACT
This agreement shall remain in force until terminated by either party as set forth i
Paragraph 12, "Suspension or Termination of Services."
6. PAYMENT OF FEES
The Consultant's sales tax audit and information services shall be self-funding ar
entirely predicated and contingent upon the Consultant's audit service producing nE
sales/use tax revenue that would not otherwise have been realized by the City, TI
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- sales/use tax audit shall be paid by quarterly invoice, after the City has received thc
revenue from the correction and the quarterly distribution report has verified this receipt
Each invoice shall include the business name, permit number, local allocation amoun
received by the City, and amount due the Consultant. Invoices shall be due and payablc
upon receipt.
Compensation to the Consultant for providing the quarterly information service shal
be $1,000 per quarter, payable only after the City has received the Sales Tax Inquiq
System, STARS report(s) and sufficient funds to cover the charges from the City’s sharl
of new tax revenue produced from the Consultant’s audit service. Should thl
Consultant’s audit service fail to generate sufficient new salesluse tax revenue for the Cit
to cover information service charges out of the City’s 75% share, then the Consultant sha
absorb the shortfall amount.
7. CHANGES IN WORK
If, in the course of the contract, changes seem merited by the Consultant or the Cit)
and informal consultations with the other party indicate that a change in the condition
of the contract is warranted, the Consultant or the City may request a change in contrac
Such changes shall be processed by the City in the following manner: A letter outlininl
the required changes shall be forwarded to the City by Consultant to inform them of tt-
proposed changes along with a statement of estimated changes in charges or tirr
schedule. A supplemental agreement shall be prepared by the City and approved by tt-
City according to the procedures described in Carlsbad Municipal Code Section 3.28.1 7:
Such supplemental agreement shall not render ineffective or invalidate unaffected portior
of the agreement.
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8. COVENANTS AGAINST CONTINGENT FEES
The Consultant warrants that their firm has not employed or retained any cornpan)
or person, other than a bona fide employee working for the Consultant, to solicit 01
secure this agreement, and that Consultant has not paid or agreed to pay any compaq
or person, other than a bona fide employee, any fee, commission, percentage, brokeragc
fee, gift, or any other consideration contingent upon, or resulting from, the award o
making of this agreement. For breach or violation of this warranty, the City shall have tht
right to annul this agreement without liability, or, in its discretion, to deduct from th(
agreement price or consideration, or otherwise recover, the full amount of such fee
commission, percentage, brokerage fees, gift, or contingent fee.
9. NONDISCRIMINATION CLAUSE
The Consultant shall comply with the state and federal laws regardin!
nondiscrimination.
IO. TERMINATION OF CONTRACT
In the event of the Consultant’s failure to prosecute, deliver, or perform the work a
provided for in this contract, the City may terminate this contract for nonperformance b
notifying the Consultant by certified mail of the termination of the Consultant. Th
Consultant, thereupon, has five (5) working days to deliver all work in progress to th
Finance Department, Attention: Lisa Hildabrand, Finance Director, 1200 Carlsbad Villag
Drive, Carlsbad CA 92008. The Finance Director shall make a determination of fa(
based upon the information delivered to City of the percentage of work which th
Consultant has performed which is usable and of worth to the City in having the contra(
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completed. Based upon that finding as reported to the City Manager, the Manager shz
determine the final payment due to Consultant or refund due to City under the terms (
the contract.
11. DISPUTES
If a dispute should arke regarding the performance of work under this agreemer
the following procedure shall be used to resolve any question of fact or interpretation nc
otherwise settled by agreement between parties. Such questions, if they becorr
identified as a part of a dispute among persons operating under the provisions of th
contract, shall be reduced to writing by the principal of the Consultant or the Financ
Director of the City of Carlsbad. A copy of such documented dispute shall be forwarde
to both parties involved along with recommended methods of resolution which would k
of benefit to both parties. The Finance Director of the City or principal receiving the lett(
shall reply to the letter along with a recommended method of resolution within ten (1(
days. If the resolution thus obtained is unsatisfactory to the aggrieved party, a lettc
outlining the dispute shall be forwarded to the City Council for their resolution through tt-
Office of the City Manager. The City Council may then opt to consider the directe
solution to the problem. In such cases, the action of the City Council shall be bindin
upon the parties involved, although nothing in this procedure shall prohibit the partie
seeking remedies available to them at law.
12. SUSPENSION OR TERMINATION OF SERVICES
This agreement may be terminated by either party upon tendering thirty (30) dab
written notice to the other party. In the event of such suspension or termination, upc
request of the City, the Consultant shall assemble the work product and put same
order for proper filing and closing and deliver said product to City. In the event c
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“ termination, the Consultant shall be paid for work performed to the termination date;
however, the total shall not exceed the lump sum fee payable under paragraph 4. The
City shall make the final determination as to the portions of tasks completed and the
compensation to be made.
13. STATUS OF THE CONSULTANT
The Consultant shall perform the services provided for herein in Consultant’s own
way as an independent contractor and in pursuit of Consultant’s independent calling, and
not as an employee of the City. Consultant shall be under control of the City only as tc
the result to be accomplished, but shall consult with the City as provided for in the
request for proposal.
The Consultant is an independent contractor of the City. The payment made to the
Consultant pursuant to the contract shall be the full and complete compensation to whict-
the Consultant is entitled. The City shall not make any federal or state tax withholdings
on behalf of the Consultant. The City shall not be required to pay any workers
compensation insuranc.e on behalf of the Consultant. The Consultant agrees to indemnio
the City for any tax, retirement contribution, social security, overtime payment, or workers
compensation payment which the City may be required to make on behalf of thF
Consultant or any employee of the Consultant for work done under this agreement.
The Consultant shall be aware of the requirements of the Immigration Reform an(
Control Act of 1986 and shall comply with those requirements, including, but not limitec
to, verifying the eligibility for employment of all agents, employees, subcontractors an(
consultants that are included in this agreement.
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14. CERTIFICATION OF CONFIDENTIALITY
Section 7056 of the State of California Revenue and Taxation Code specifically limits
the disclosure of confidential taxpayer information contained in the records of the State
Board of Equalization. This section specifies the conditions under which a City or county
may authorize persons other than officers and employees to examine State Sales and
Use Tax records.
A. The Consultant is authorized by this Agreement to examine sales and use tax
records of the State Board of Equalization provided to City pursuant to contract
under the Bradley-Burns Uniform Sales and Use Tax Law.
B. The Consultant is required to disclose information contained in, or derived from,
those sales and use tax records only to an officer or employee of the City who
is authorized by resolution to examine the information.
C. The Consultant is prohibited from performing consulting services for a retailer
during the term of this Agreement.
D. The Consultant is prohibited from retaining the information contained in, or
derived from, those sales and use tax records, after this Agreement has expired
Information obtained by examination of State Board of Equalization records shall be
used only for purposes related to collection of local sales and use tax or for othel
governmental functions of the City as set forth by resolution adopted pursuant to Sectior
7056(b) of the Revenue and Taxation Code.
The resolution shall designate the Consultant as a person authorized to examine
sales and use tax records and certify that this Agreement meets the requirements se
forth above and in Section 7056(b)(1) of the Revenue and Taxation Code (see Exhibit C)
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” The Consultant hereby certifies that any and all information examined in the conduc
of work performed is to be utilized only for those purposes authorized by the City an(
by the Bradley-Burns Uniform Local Sales and Use Tax Law.
15. OWNERSHIP OF DOCUMENTS
All plans, studies, sketches, drawings, reports, and specifications as herein requirec
are the property of the City, whether the work for which they are made be executed c
not. In the event this contract is terminated, all documents, reports, and studies shall b
delivered forthwith to the City.
16. REPRODUCTION RIGHTS
The Consultant agrees that all copyrights which arise from creation of the wor
pursuant to this contract shall be vested in City and hereby agrees to relinquish all claim
to such copyrights in favor of City.
17. HOLD HARMLESS AGREEMENT
The City, its officers, and em’ployees shall not be liable for any claims, liabilitie:
penalties, fines, or any damage to goods, properties, or effects of any person whateve
nor for personal injuries or death caused by, or resulting from, any intentional or negliger
acts, errors or omissions of Consultant or Consultant’s agents, employees, c
representatives. Consultant agrees to defend, indemnify, and save free and harmless th
City and its officers and employees against any of the foregoing claims, liabilitie:
penalties or fines, including liabilities or claims by reason of alleged defects in any plan
and specifications, and any cost, expense or attorney’s fees which are incurred by th
City on account of any of the foregoing.
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18. ASSIGNMENT OF CONTRACT
The Consultant shall not assign this contract or any part thereof or any monies dL
thereunder without the prior written consent of the City.
19. SUBCONTRACTING
If the Consultant shall subcontract any of the work to be performed under th
contract by the consultant, Consultant shall be fully responsible to the City for the ac
and omissions of Consultant's subcontractor and of the persons either directly (
indirectly employed by the subcontractor, as Consultant is for the acts and omissions 1
persons directly employed by consultant. Nothing contained in this contract shall crea
any contractual relationship between any subcontractor of Consultant and the City. Th
Consultant shall bind every subcontractor and every subcontractor of a subcontractor b
the terms of this contract applicable to Consultant's work unless specifically noted to th
contrary in the subcontract in question approved in writing by the City.
20. PROHIBITED INTEREST
No official of the City who is authorized in such capacity on behalf of the City t
negotiate, make, accept, or approve, or take part in negotiating, making, accepting, o
approving of this agreement, shall become directly or indirectly interested personally il
this contract or in any part thereof. No officer or employee of the City who is authorize(
in such capacity and on behalf of the City to exercise any executive, supervisory, c
similar functions in connection with the performance of this contract shall become direct1
or indirectly interested personally in this contract or any part thereof.
21. VERBAL AGREEMENT OR CONVERSATION
No verbal agreement or conversation with any officer, agent, or employee of the City
either before, during or after the execution of this contract, shall affect or modify any o
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the terms or obligations herein contained nor entitle the Consultant to any additional
payment whatsoever under the terms of this contract.
22. SUCCESSORS OR ASSIGNS
Subject to the provisions of Paragraph 18, "Hold Harmless Agreement," all terms,
conditions, and provisions hereof shall insure to and shall bind each of the parties hereto,
and each of their respective heirs, executors, administrators, successors, and assigns.
23. EFFECTIVE DATE
This agreement shall be effective on and from the day and year first written above.
24. CONFLICT OF INTEREST
The consultant shall X shall not file a conflict of interest statement with the
city clerk in accordance with the requirements of the City of Carlsbad conflict of interest
code. The disclosure categories shall be categories 1 1 2 & 3.
25. INSURANCE
The Consultant shall obtain and maintain policies of general liability insurance,
automobile liability insurance, and a combined policy of worker's compensation and
employers liability insurance from an insurance company authorized to do business in the
State of California which meets the requirements of City Council Resolution No. 91-403
in an insurable amount of not less than one million dollars ($1,000,000) each, unless a
lower amount is approved by the City Attorney or the City Manager. This insurance shall
be in force during the life of this agreement and shall not be canceled without thirty (30)
days prior written notice to the City sent by certified mail.
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" The City shall be named as an additional insured on these policies. The Consultant
shall furnish certificates of insurance to the City before commencement of work.
Executed by Consultant this day of I 19".
MUNICIPAL RESOURCE CONSULTANTS CIN OF CARLSBAD, a municipal
PARTNER: JOHN T. AUSTIN, INC. corporation of the State of California
(name of Consultant) ATTEST :
By 1 City aL=k&!* Clerk
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(print name here) ////
(title and organization of signatory) L4!!
APPROVED AS TO FORM:
RONALD R. BALL
citya 9 .Q , ~ ~.
BY Deputy City Attorney 246. 7 3
B:LAGREEMENTS\MRC.AGR
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Exhibit A
CONSULTANT SERVICES
Municipal Resource Consultants (MRC) shall provide sales tax audit and information
services to the City of Carlsbad (City). The objectives, scope, procedures, timing,
compensation and qualifications are set forth as follows:
I. SALES/USE TAX ALLOCATION AUDITS
Many California cities are not receiving the sales/use tax revenue to which they
are entitled due to point-of-sale and other types of taxpayer reporting errors (for
discussion of misallocation causes, see enclosed MRC Imiphts newsletter).
When businesses fail to properly report their California sales/use tax, the local
allocation is distributed in error to pool accounts or other jurisdictions.
Accordingly, the purpose of MRC's initial and ongoing allocation audit service is
to detect and correct taxpayer reporting errors and thereby generate new
sales/use tax revenue which would not otherwise have been realized by the City
of Carlsbad. Unlike most tax audits, MRC's allocation audit service produces
new revenue without causing any additional tax liability for business.
As discussed under Section IV, MRC's audit staff is organized into highly
focused areas of specialization related to either the detection or correction of
misallocations. In this regard, the audit service scope includes, but is not limited to, MRC performing the following procedures and tasks;
A. DETECTION OF MISALLOCATIONS
1. Procure a computer tape of sales/use tax permit records from the
State Board of Equalization (SBE).
2. Establish master file from tape data provided in previous task.
3. Clean-up, standardize and computerize data from City's sales ta3
distribution reports provided by SBE for eight (8) previous
quarters, current quarter and each future quarter service i:
provided.
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4. Develop a target list of potential point-of-sale/use taxpaye
reporting errors based on a physical canvassing and evaluation c
sales/use tax generating businesses located in the City of Carlsbac
These businesses are to be analyzed based on proprietar
guidelines established by MRC, formulated through expel
use tax, business marketing organization and method:
commercial/industrial sales/use tax reporting practices, and oh
conditions contributing to reporting errors.
knowledge of corporate mergers and acquisitions, sales tax vers1;
5. Meet with designated City official(s) to review service objectivc
and scope, MRC workplan schedule, public relations and logistic
matters. MRC will also establish an appropriate liaison with t€
City's coordinator and define logical checkpoints for reviewing t€
project's progress.
Note: with the exception of this initial meeting, MRC's servi
requires no time or effort on the part of City staff.
6. Contact. personnel in sales, operations and/or tax accounting
each target business to determine whether a point-of-sale/u
reporting error exists.
Note: this is accomplished with the highest regard to discretic
and professional conduct, as evidenced by the fact that MRC
allocation audits have involved more than 400,000 direct contac
with taxpayer businesses without a single complaint from
taxpayer, client or the State Board of Equalization. Our allocatic
audits are predicated on a noncontroversial, constructive, pub,
relations approach which emphasizes the importance of ea
business to the City and the mutual benefits of correcting reporti]
errors.
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7. Provide to the City and State Board of Equalization, reports
addressing each taxpayer reporting error individually, including
the business name, address, telephone number, California sales tax
permit number, individuals contacted, date(s) of contact, nature of business, reason(s) for error, recommended corrective procedure
and, if available, estimated sales/use tax revenue which should be
forthcoming to the City of Carlsbad.
8. Respond to negative findings by SBE with timely reconfirmation
documentation in order to preserve the City's original dates of
knowledge.
9. Receive and process sales/use tax quarterly distribution reports
provided to City by SBE.
10. Monitor and analyze the quarterly distribution reports with audit
focus on the following:
a. Those accounts with previously detected reporting errors to
ensure that the corrections are made for current quarters
plus retroactive adjustments for eligible amounts
improperly distributed in prior quarters.
b. Those accounts representing 90% of the City's total sales/use
tax revenue to identify and investigate significant
aberrations (e.g., negative fund transfers, declines,
deficiency assessments, etc.).
C. Those accounts having a use it%x de&nation to ascertain
why the tax is being classified as use tax rather than sales
tax.
d. Those accounts receiving deficiency assessments to ensurc
that the City receives its local allocation.
11. Review the City's purchases to identify opportunities for the City tc
recover the local allocation on transactions subject to use tax. MRC
will also prepare the necessary documentation to facilitatc
recovery, including assistance in preparing and filing the returns.
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B. TYPES OF AUDITS
MRC's allocation audit service includes five distinctly different types of audits:
o Initial and periodic field audits
0 Permitization audits
o Deficiency assessment audits
0 Purchases audits
o Quarterly Distribution Report audits
The nature of each audit is further described as follows:
1. FIELD AUDITS
MRC's initial and periodic field audits include a physical canvassing an
evaluation of sales/use tax generating businesses located in the City. 1
the absence of this labor-intensive, time-consuming undertakin;
significant misallocations will remain undetected.
MRC's field audits focus on those businesses located in the City fro]
which the City has not been receiving sales/use tax revenue, but shoul
be.
2. PERMITIZATION AUDITS
Wholesalers,contractors, processors, manufacturers and other non-ret;
businesses will frequently not have a sales tax permit properly register€
to the jurisdiction in which they are located because their busine
operations domot include a point-of-sale qualifying activity.
However, these companies will often generate local sales/use tax fro
audit deficiency assessments, occasional sales (i.e., mergers ar
acquisitions), and self-accrual of use tax on purchases.
MRC's field audits facilitate the identification and correction
improperly registered permits for companies not having point-of-sa
operations in the City.
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3. DEFICIENCY ASSESSMENT AUDITS
When the California State Board of Equalization audits a business for
sales/use tax compliance, it is not uncommon for the business to receive a
substantial deficiency assessment due to underpayments and/or
undercollections.
In many cases, the local allocation portion of the deficiency assessment is
distributed in error to the State pool, County pools or other jurisdictions.
Accordingly, MRC has developed proprietary criteria and techniques to
detect and correct SBE deficiency assessment misallocations and thus
expand the benefits produced by our allocation audit service.
4. PURCHASES AUDITS
When California customers purchase tangible personal property for
which title passes out-of-state, the transactions are subject to use tax
(rather than sales tax) which is typically collected by the vendor who in
turn remits it to the SBE, with the local allocation distributed statewide or
countywide through the pools, based on customer location.
Under certain conditions, the City may elect to self-accrue the use tax anc
remit it directly to the SBE, in which case the local portion will come bad
to the City in the same manner as sales tax.
MRC's purchases audits will include a review of the City's purchases tr
identify opportunities for the City to recover the local allocation ox
transactions subject to use tax. In this regard, MRC will prepare th
documentation to facilitate the recovery, including assistance in preparin
and filing the tax returns.
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5. QUARTERLY DISTRIBUTION REPORT AUDITS
Every three months, the City receives a Quarterly Distribution Report
(QDR) from the SBE with the local allocation amount broken down by
permit number, grouped according to business code, for each account that
has identified the City of Carlsbad as the point-of-sale for the quarter
ending three months prior to receipt of the QDR.
In conjunction with our initial field audit, we enter data from the current
and previous eight QDRs for processing on our Sales Tax Analysis and
Reporting System (STARS) in order to facilitate an ongoing sales/use tax
audit program.
In the absence uf such a program, there is no way of identifying
misallocations that occur between field audits.
Our QDR audits have the same objective as our other allocation audits; to
detect and correct taxpayer reporting errors and thereby generate new
sales/use tax revenue for the City. However, OUT QDR audits focus on
those accounts where we observe a decline in the City's sales/use tax
revenue to either nothing or substantially less than what has been
reported on an historical trend basis.
In most cases, the accounts showing zero balances have either relocated or
simply reported late, in which case the payments will not be reflected
until the next QDR. Therefore, six months elapse before the QDRs
indicate whether a zero balance account can be attributed to a late
payment or some other problem.
Although most zero balances and substantial declines occur for valid
reasons, our QDR audits are resulting in the detection and correction of
numerous accounts that were reporting properly until they changed thei~
sales/use tax reporting procedures and created misallocations.
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Whether the reporting procedures are changed due to a
merger/acquisition, turnover of tax administration personnel,
computerization of the sales/use tax compliance function or other reasons
we encounter, the local amount of California sales tax is typically
misallocated because it is reported on either a consolidated, destination or
use tax basis.
I
Considering that:
o there is a three-month lag time in reporting the quarterly sales tax
distribution results
o there is a six-month lag time in reporting late-paying businesses
that all appear as zero balance accounts on the previous QDR
o considerable time is required to input and analyze QDR data and
contact the taxpayer in order to ascertain the cause of each
potential misallocation
o under California SBE regulations, cities and counties may only
recover rnisallocated revenue for the three quarters prior to the SBI
being notified of the reporting error
it is obvious that the QDR audits must be conducted in a highly efficien
and timely manner or the eligibility window closes and the opportunit]
for the City to recover misallocated revenue is forfeited.
C. CORRECTION OF MISALLOCATIONS
For each misallocated account detected, MRC will coordinate with th
business and SBE to make the necessary corrections plus retroasth
adjustments for eligible amounts of sales/use tax improperly distribute
in prior quarters. This task is simply stated, but enormously complex ar
time-consuming, for the following-described reasons:
When MRC detects taxpayer reporting errors, together with the reaso~
therefor, less than half of our audit work is accomplished. Most of 01
audit work is devoted to facilitating corrective action. This is largely d
to the preponderance of reporting errors by out-of-state headquarter
distributors, contractors, processors, manufacturers and lessors engag
in business-to-business sales in California. In terms of dollars, the
companies account for more than 90% of misallocated sales/use t
revenue.
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For these companies, there is considerable confusion due to the
complexities posed by California's unique point-of-sale regulations. The
reporting problems are further compounded when the regulations are
applied to multiple California locations with each having a
product/customer mix of business-to-business sales where some of the
transactions are subject to sales tax, some are subject to use tax and some
are exempt.
Unlike over-the-counter retail consumer outlets where all sales are
taxable, business-to-business taxpayers sell to Original Equipment
Manufacturers (OEMs), resellers and other types of exempt customers, as
well as end users, with some products requiring installation affixing
them to real property.
For convenience and expediency, it is common for taxpayers located outside of California to erroneously report by customer destination or
characterize sales transactions as being subject to use tax or contractor-
installed classifications.
The State Board of Equalization does not have sufficient staff or incentive
to correct these types of misallocations.
In order to correct these complex reporting errors, h4RC undertakes a
travel-intensive liaison program to facilitate coordination and
communication between typically four parties; sales/operations
personnel at the taxpayer's local operation, tax personnel at the company's
corporate headquarters, and State Board of Equalization personnel at
Sacramento and the in-state/out-of-state District offices.
Implementation of corrective action normally requires tt MRC's senioI
personnel travel to the taxpayer's headquarters to personally disscuss the
nature of the reporting error and applicable regulations with corporate
tax counsel. The objective of these meetings is to correct the distribution
reporting error by assisting the taxpayer in developing an allocatior
formula which is acceptable to the State Board of Equalization. (Note: All
expenses incurred to provide the audit service are absorbed by MRC
including employee salaries, insurance, airfare, auto rentals, lodging
meals, communications, etc.).
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a D. TIMING CONSIDERATIONS
The SBE will only allow the City to recover misallocated sales/use tax for
up to three quarters prior to the SBE being notified of the reporting error
for a given account. Consequently, if a misallocating account has had its pojnt-of-sale located in the City for more than three quarters, the City
forfeits the right to recover a portion of its misallocated sales tax with
every elapsed quarter that a reporting error remains undetected.
The preliminary workplan schedule following this page presents MRC's
time frames for accomplishment of the prescribed tasks. As indicated, the
initial field audit is to be completed within 90 to 120 working days
following receipt of authorization.
By significantly accelerating the timetable for performance of the audit,
MRC can convert a cost (forfeited revenue) into a benefit (recovered
revenue).
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E. QUARTERLY PROGRESS REPORTS
On a quarterly basis, MRC is to provide the City with audit progress
reports to include, but not be limited to, the following:
1. Status of audit work in progress, including:
a. Copies of reports provided to the SBE addressing eacl
point-of-sale taxpayer reporting error individually
including the business name, address, telephone number
California sales tax permit number, individuals contacted
date(s) of contact, nature of business, reason for error an(
recommended corrective procedure.
b. Copies of misallocation reconfirmation documentation, i
response to negative findings by the SBE, in order t
preserve original dates of knowledge.
2. Actual sales/use tax produced for the City by MRC’s audit servic
on a quarterly and cumulative basis.
3. Projected sales/use tax revenue forthcoming to the City as a rest
of MRC’s allocation audits, delineated according to source, timi1
and one-time versus ongoing.
4. Alphabetical listing- of all misallocated XCOUI~S detected for f
City by MRC including, for each, the permit number, correctic
status, payment amount received by the City, quarter to whi
payment is related and payment source (e.g., ‘fund transfc
deficiency assessment, etc.).
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11. INFORMATION SERVICES
The sales tax module will enable MRC to assist the City of Carlsbad to maintain
and enhance revenue by developing and implementing strategies and solutions
based on:
o Revenue Recovery Audits o SWOT' Analysis
0' Business Retention o Revenue Forecasting
o Business Expansion o Strategic Planning
o Fiscal Impact Analysis o Special Studies & Reports
Examples of these applications using the sales tax module are summarized as
follows:
0 Revenue Recovery Audits
The logical starting point for any city seeking revenue enhancement is to
make sure it is receiving all the revenue it is entitled to from its businesses
and intermediaries.
Computerized access to sales tax registration and allocation data
facilitates the auditing of sales tax and other City revenues. For example,
the GRIP sales tax module includes a quarterly updated Sales Tax Inquiry
System installed by MRC on IBM compatible PCs, designated by the City,
to provide the City's business license staff with on-line access to sales tax
information on all businesses that the SBE has registered to the City
(further discussed below under sales Tax Inquiry System).
0 Business Retention
Many cities are unaware that 80% or more of their general fund revenue is
generated by 10% to 25% of their businesses. It is thus commonplace for
cities to inadvertently neglect or alienate businesses that are vital to the
their fiscal health and allow - or unintentionally encourage - these
businesses to leave, and take their revenue with them.
The sales tax module includes a quarterly updated report on the City's
major (and top 100) sales tax producers ranked in order according to level
of sales tax produced for current and prior periods.
With this accurate information, the City can develop and implemeni
proactive public relations programs that will help retain these vital
businesses and their revenue through improved communication and
cooperation.
* Strength *>i'eaknesses, Opportunities, Threats
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0 Business Expansion
On a regular basis, taxpaying businesses (including institutions and
government agencies) make arbitrary decisions that have positive and
negative impacts on the City's revenue.
Typically, these taxpayers do not realize the revenue impact thei~
decisions have on the City and the discretionary latitude they possess tc
enhance or impair City revenues.
By combining a the sales tax analysis with our knowledge of how thc
administrative procedures of taxpayers and intermediaries affect Cit,
revenue, MRC can identify those taxpayers with the greatest potential fa.
enhancing City revenue through modification of their procedures.
In addition to retaining vital businesses, a proactive taxpayer relation
program enables the City and its taxpayers to explore opportunities fo
enhancing revenue without creating additional tax liability.
0 Fiscal ImDact Analvsis
Many cities charge impact fees that partially defray estimate
infrastructure costs caused by development.
Rarely, however, is a provision made to recover the deficit produce
development or business exceeds the general fund revenue produce
For this reason, many cities unknowingly subsidize developments ax
businesses that are not paying their way. Which is one of the reasoj
revenue shortfall gaps are widening.
when the ongoing actual cost for a county or City to service
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0 SWOT Analvsis
Every City has unique Strengths, Weaknesses, Opportunities and Threats
(SWOTS) that affect its businesses and therefore its revenue base. Current
examples include:
- Major businesses migrating inland at a record pace to avoid urban
traffic congestion, high housing and land costs, and long-distance
commutes for their employees
- Legally binding decisions entitling major industries and businesses
- Much of a jurisdiction's general fund revenue being generated by
to budget-busting tax reductions, exemptions and refunds
businesses in an industry which expects a prolonged economic
downturn
To develop reliable revenue forecasts and proactive strategic plans that
will maintain and enhance revenue, cities must be able to assess how
constantly changing external dynamics translate to SWOTs for their
businesses and revenue bases. The sales tax module provides much of the
basis for this type of assessment.
0 Revenue Forecasting
Although the downside implications for errant revenue forecasting can bc
severe and embarrassing, the typical city has no reliable basis fo
assessing how actual and potential changes or unusual developments wil
impact its revenue base and fiscal future.
Based on a SWOT analysis, MRC can assist the City in developing "wha
if'' sales tax revenue forecasts based on pessimistic, optimistic and mixed
assumptions scenarios. This analysis is especially important to the Cit]
when an adverse impact is of sufficient magnitude to cause fiscal crisis
Developing these scenarios will lead the City to strategic planning tha
will help avoid catastrophic outcomes.
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0 Strate~c - Planning
In order to develop and implement a strategic plan for maintaining and
enhancing revenue, the City must be able to define its Strengths,
Weaknesses, Opportunities and Threats (SWOTs).
With the sales tax module, MRC can assist the City in assessing its SWOTs
and, based on that assessment, developing a strategic plan which will:
- Maintain and enhance revenue by capitalizing on the strengths and
- Contain losses by taking defensive steps to eliminate or reduce
opportunities
weaknesses and threats
0 SDecial * Studies & ReDorts
Cities frequently need special studies or reports for purposes such as:
- Negotiating revenue-sharing agreements with private developers
- Evaluating and monitoring performance in specific development5
- Analyzing retail sales leakage
- Planning project development for revenue generation
- Promoting the City for business and industry
business users and other jurisdictions
project areas, annexation areas, etc.
MRC’s sales tax module provides the basis for estimating, tracking an
evaluating revenue generation by land use, development, user, industr
parcel, address or designated geographic area. This multi-dimension
capability simplifies the task of planning and producing special repor
and studies.
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The sales tax module consists of a Sales Tax Inquiry System, STARS reports and
related consulting, further described as follows:
A. SALES TAX INOUIRY SYSTEM
MRC will install and update quarterly the City's sales tax registration and
allocation data on IBM compatible PCs designated by the City. MRC will
also train authorized City staff in the use of the Inquiry System and an
easy-to-follow user manual, also furnished by MRC.
Because the Sales Tax Inquiry System contains confidential information,
access is limited to authorized personnel by making the System password - protected.
The Inquiry System will enable City staff to analyze the contribution of
sales/use tax revenue from each business in the City, on an individual,
grouped or sorted-order basis by business name, business type, permit
number, size ranking, street address, development, shopping center or
other geographic area.
All sales tax data processed by MRC is located on the Inquiry System.
History for each account can be called up by account number and even by
business tax registration number(s), if the latter are added to the Inquiry
System. MRC has made the Inquiry System extremely user-friendly, even
incorporating different types of name and address searches. For example,
the address search only needs the street name and will fill in the direction
and proper abbreviation for the street type.
Also, in looking up a particular type of business segment, a listing of
business codes is shown on a "pop up'' menu to help the user identify
which code to select. The Inquiry System can also be used to geo-code
specific areas such as business districts, shopping centers, project
redevelopment areas, industrial parks, etc. MRc's Tnquiry System -will
even generate the geo-cded addresses, thus eliminating the need to
manually place a code by each business in a geo-area. The System will
also eliminate a geo-area in a global command rather than having to
eliminate geo-coded accounts one-by-one when removing a geo-area.
MRC's Sales Tax Inquiry System would be a particularly valuable tool for
administration of the City's business license tax program.
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B. STm 6ALES TAX ANALYSIS & REPORTING SYSTEM) REPORTS
Quarterly, MRC will provide the City with an updated set of bound
includes, but is not limited to, the following:
STARS reports (sample enclosed). The scope of MRC's STARS reports
1. Cleaning up, standardizing and automating data from the City's
sales and use tax distribution reports provided by the SBE for eight
(8) previous quarters, the current quarter and each future quarter
service. This is done to provide two benchmark years in the initial
report to the City. Amounts for the most recent quarter are
included in each STARS report, but are not used for benchmark
purposes as many accounts are incomplete because of late-paying
businesses.
MRC clients use STARS reports to gain a better understanding of
where their sales tax comes from, what trends, good or bad, are
which the jurisdiction is most dependent for its sales tax revenue.
2. Receiving and processing sales tax distribution reports quarterly.
3. Reorganizing and refining the computerized sales tax data for the
occurring in their sales tax base, and to identify those businesses on
City using MRC's STARS.
4. Analyzing the City's major sales tax producers.
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All major sales producers and business categories are monitored
and analyzed quarterly to include the following:
a. Manavement Swnmarv, Sales Tax DiPest, Charts. MRC
delivers each quarter with the STARS reports, a confidential
Management Summary, a non-confidential Sales Tax Digest,
and twelve color charts that portray graphically the City's
sales tax performance and composition.
be Analvsis Section, The Analysis Section of MRCs STARS
report compares the sales tax performance for the latest
complete quarter jreport benchmark year to previous
quarters and years. This section, which is an exclusive MRC
report, was instituted to replace cumbersome manual
comparisons between quarters and years.
The Analysis Section includes the following: (1) historical
performance of the top 100 accounts for up to four years, (2)
an automated analysis of the changes that occurred by
economic category and by business sector with the specific
businesses that made the major contribution to the change
delineated; and (3) an analysis by magnitude of change
indicating which key businesses grew or declined,
measured in absolute dollars and percentages.
Quarterly aberrations due to SBE audits, fund transfers and
other causes are also identified and analyzed for budget
planning and revenue forecasting purposes.
C. Major (and Top 100) Sales Tax Producers. Sales tax
performance of the top 100 sales tax accounts is shown in
order of sales tax produced with the results for the last five
quarters prominently displayed. The proportion of City
sales tax produced is also shown by each account.
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d. Sales Tax Accounts by Business Code. This report shows the
various business codes assigned by the State Board of
Equalization and the accounts assigned those codes in order
of sales tax produced. Five quarters of sales tax data are
shown for each account. The client can select the cut-off
level of this report (i.e., all accounts or just accounts that
produce over a certain amount per year). Misclassified sales
tax accounts are corrected to make the report a true
reflection of the sources of the City's sales tax income.
e. Sales Tax Trend ReDort. Data is summarized by economic
category and by business sector making up each category.
Sales tax trends are shown by quarter and by successive
benchmark years. Percent of sales tax is also shown to
indicate trends in sales tax composition as well as
performance.
Growth and decline comparisons are indicated by various
categories for forecasting and analysis.
f. Sales Tax Bv Account/Sub-Number. The State Board of
Equalization does not provide the specific sales tax amounts
generated by each individual location of a company with
multiple locations in the same jurisdiction. Such a
breakdown is needed if the City is to track sales tax by
specific geo-areas, such as shopping centers, project areas,
business districts, industrial parks, etc. STARS allocates
sales tax by location and even customizes difficult
allocations such as auto dealers with showrooms, leasing,
used cars, and body repair shops.. This report shows the
amounts allocated to each individual iocatiion for a firm with
multiple locations in the City.
g. Geo-Coding. Tracks sales tax performance within designated areas of the City (e.g., key shopping centers,
project areas, downtown business districts, etc.) Charts and
printed reports are included for each geo-area.
h. Cross Reference Reuorts. These reports allow the user tc
look up any account shown in the STARS reports by name,
address, or account number.
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1. SDecial Business Tax ReDort. MRC's STARS includes a
report that is specifically designed to facilitate the City's
business license tax administration by replacing the manual
yellow registration control cards.
These cards come in no particular order and are
cumbersome to use. MRC produces a printed report each
quarter that lists all changes to the City's sales tax records by
the type of change (i.e., new businesses, closed businesses,
new addresses, new owners, etc.). Under each type of
change are the accounts in clean address order.
By correcting, cleaning up and standardizing addresses
business names and business classifications on all of tht
City's sales tax generators, MRC is able to provide the City'!
business license staff with another valuable audit tool. MRC
will also provide the City with a copy of the cleaned UT
sales tax files on floppy disk or nine-track tape if the Cib
wishes to add the data to its database.
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C. CONSULTING SERVICES
In conjunction with the Sales Tax Inquiry System and STARS reports,
MRC shall provide consulting services to include:
1. Providing City staff with post-audit sales tax orientation:
a. Conducting technical seminar on California's local sales tax
distribution process
b. Training staff in the fundamentals of sales/= tax allocation
auditing should the City desire to assume responsibility for
future maintenance of local retail accounts internally.
2. Preparing and analyzing a list of the City's major sales/use tax
generators to assist the City in developing a public relations
program to prevent the loss of these important businesses.
3. Profiling for Economic Development personnel the most
economically desirable/undesirable types of
developments/business uses and the reasons why.
4. Providing a list of businesses located (or doing business) in the
City that are not presently producing as much sales/use tax to the
City as they could be through constructive changes in
marketing/purchasing procedures (with the City's approval, MRC
will assist the City in pursuing these opportunities and
implementing the changes).
5. Assisting in defining specific geographic areas for which the City
would have an interest in knowing the sales/use tax produced.
6. Serving as a resource to assist the City on an "as-needed" basis by
providing legal and technical support OF sales/use tax issues and
questions regarding proposed legislation, estimated revenue on
proposed projects, revenue-sharing negotiations, retail sales
leakage, budget projections, etc.
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D. TIMING
MRC shall commence preparing the Sales Tax Inquiry System and STARS
reports within 10 working days following receipt of the following:
o Contract approval and resolution designating h4RC as the
authorized City Consultant to examine sales and use tax records
(see Exhibit C); and
o State Board of Equalization quarterly distribution reports for most
recent nine (9) consecutive quarters.
The initial Sales Tax Inquiry System shall be delivered and installed on
IBM compatible PCs designated by City, together with the STARS reports,
within 45 working days following receipt of the above. The quarterly
updated Inquiry System and STARS reports will be delivered to the City
within 30 working days following receipt of the quarterly distribution
reports.
MRC will provide consulting services to the City in conjunction with
delivery of the Inquiry System and STARS reports following completion
of the enhancement audits.
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February 19, 1993
Municipal Resource Consultants
1381 Warner Avenue, Suite F
Tustin, CA 92680
Attention: John O'Sullivan
Re: Agreement for Sales Tax Audit and Information Services
The City of Carlsbad approved an agreement with Municipal Resource
Consultants on February 9, 1993, to provide sales tax audit and
information services. A fully executed copy of the agreement is enclosed.
In accordance with Section 25 of the agreement, you are required to
file a Conflict of Interest Statement with the City Clerk of the
City of Carlsbad. Anyone in the company who is working on this
city project must file Form 730, Statement of Economic Interests,
and must report investments and interests in real property,
Disclosure Categories 1, 2, and 3. This includes Schedules A, B, (2-1, C-2, D, E, F, H-1, H-2, and H-3. Category 4, Schedule G is
not applicable to your disclosure category.
Enclosed for your use in meeting the filing requirements is a Form
730 and Instructions, and a copy of the Appendix to the Local Conflict of Interest Code. We will provide additional forms upon request.
Your comDleted Assumins Office Statement is due in the City Clerk's Office no later than 5:OO p.m., on March 12, 1993.
If you have any questions, please call me at 434-2808.
LL!Q&QL ,e.* ALETHA L. RAUTENKRANZ, CMC 1
City Clerk
ALR: ijp
Enclosures
1200 Carlsbad Village Drive - Carlsbad, California 92008-1 989 - (61 9) 434-2808