AgdaPkt 2000-10-23 - Laserfiche WebLink

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� R�PORT To the Honorable Mayor and City Council From the City Manager October 23, 2000 Subject Agreement for utility users tax auditing and legal services � Recommendation It is recommended that the City Council authorize the City Manager to enter into an agreement for utility users tax revenue enhancement audit services with MBIA MuniServices Company (MMC) and enter into a legal services agreement with Donald H. Maynor, PLC, for legal services associated with utility users tax collection and enforcement services. Background , The City of Redwood City has contracted with MMC (formerly Municipal Resource Consultants) since 1994 for audit and legal services relating to the City's utility users tax (UUT). For fiscal year 1998/1999, UUT revenue totaled $5,034,025 million, or approximately 9.7% of the City's total revenue. Since 1994, MMC has generated additional UUT revenue for the City of approximately $1,004,346. In addition, MMC (through the legal services of Donald H. Maynor, PLC) has alerted us to potential problems administering our UUT ordinance. For example, two years ago, Mr. Maynor and MMC worked at the state and national levels to ensure that the Intemet Tax Freedom Act did not preclude the City from continuing to tax voice telecommunications that traveled over the Internet, as opposed to traveling over a more traditional voice line. The history of the program demonstrates the need and value of a comprehensive program that includes specialized audit and legal services. Due to the complexity of utility tax issues, the City staff cannot provide such needed expertise (i.e., lawyers, auditors and accountants specializing in utility taxation). In the past, compensation for MMC's work has been based on a contingency or performance fee, where the City pays MMC 25% of the total "additional new" revenue received by the City for a period of three years following the correction made by MMC, along with 25% of the total retroactive recovery (if applicable). , MMC now proposes, and City staff now recommends, to fund the program via an annual fixed fee equal to one-half of one percent (0.5%) of the City's total UUT revenue which is estimated at $28,040 for the current calendar year. KEY FEATURES Some of the key features of the program are: • Identifies utility businesses doing business in the City that are not collecting the UUT �.g., there are over 600 licensed telephone companies in California). • Provides utilities with accurate geocoding boundaries of City based on street address and ZIP Plus Four. This Program will satisfy the requirement under proposed federal legislation for cities to provide wireless companies such geocoding information. • Assists City Attorney's Office and Finance Department in developing administrative procedures to reflect changes in technology and regulation. Eliminates ambiguity in enforcement that can produce litigation. • Places the City's UUT Ordinance, Regulations and Administrative Rulings on MMC's Website for easy access to tax-collecting utilities. • Assists the City staff in addressing complex tax application and exemption issues that arise from time to time as new products and technologies are introduced. � _ __ _. _ . . . . . _ _ .._.. .. � ._._.. _ _ . _ . _ _ r .__ _