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<br />ANALYSIS <br />The RFQ for Sales Tax Revenue Enhancement-Consulting was issued on March 3, <br />2015 to 3 vendors. It was due on April 3, 2015 and 2 of the 3 vendors responded with <br />proposals. <br /> <br />The proposal from MuniServices (the current service provider) indicates a decrease in <br />contingency fees from its current 25% to a proposed 15%. These numbers are <br />consistent with both proposals, but the proposed quarterly service fee with <br />MuniServices is significantly less (less than 40%) of the same fee proposed by the <br />alternative vendor. The other significant factor is the “ramp up” time and costs for a new <br />vendor to become familiar with businesses in Redwood City and to establish the agency <br />relationship with the State Board of Equalization on behalf of Redwood City. <br /> <br />Periodically MuniServices provides a Sales Tax Progress Report showing the actual <br />and projected results of the sales tax audit services provided. Actual results indicate <br />that the City has realized a significant return on its investment in MuniServices. The <br />projected return for the 4 quarters beginning April 1, 2015 through March 31, 2016 is a <br />net $615,000. <br /> <br />The RFQ for Business License Compliance services was issued on March 19, 2015. It <br />was sent to three (3) companies known to provide such services. In response to the <br />RFQ, the City received two (2) proposals by submittal deadline of April 23, 2015. The <br />companies submitting the proposals were HdL Software, LLC and MuniServices, LLC. <br />MuniServices, the current service provider proposed a reduction of 10% in contingency <br />fees, from 40% to 30%. Following the evaluation process, staff selected MuniServices <br />as the company that would best meet the City’s objectives for Business License <br />Compliance Services. The City has benefited greatly from the work provided by <br />MuniServices in the past and has received excellent customer service. <br /> <br />The information provided by Muniservices is important for budget planning, trend <br />analysis, economic development analysis, and other projects requiring tax revenue <br />statistics to assist in analyzing the City’s economic base. Most importantly, their <br />services provides an early warning for trends in the economy, as well as a high level of <br />assurance that appropriate taxes are being collected and assigned to the City of <br />Redwood City. <br /> <br />ALTERNATIVES <br />The City Council could choose to not renew the contract with MuniServices which would <br />require Redwood City staff to undertake an independent process for selecting a firm. <br />Any resulting agreement would likely be at an increased cost since the City would not <br />be able to negotiate the same competitive rates as those achieved through the <br />consolidated RFQ. <br /> <br />FISCAL IMPACT <br />Assuming the same level of discovery as in recent history, it is expected that the City <br />7.1.H. - Page 2