HomeMy WebLinkAboutResolutions 89-344 N.C.S. 11/06/1989
~~S®ILI~IOfI No. 89-344 N.C.S.
of the City of Petaluma, California
1 RESOLUTION OF THE CITY OF PETALUMA AUTHORIZING
2 EXECUTION OF AN AGREEMENT 6dITH
3 MUNICIPAL RESOURCE CONSULTANTS (MRC )
4
5
6 NOTnI, THEREFORE BE IT RESOLVED BY THE CITY
7 COU1dCIL OF THE CITY OF PETALUMA THAT:
8
9 The City Manager is hereby authorized to execute an
10
11 agreement, "Exhibit A" incorporated herein by reference with)
12
13 Municipal Resource Consultants (MRC) to provide Sales Tax i
14
15 Enhancement and Information Services.
Under the power and authority conferred upon this Council by the Charter of said City.
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approved as to
Council of the City of Petaluma at a (Regular) (j~~;~(~~~a~) meeting ~ form ,~f~
on the ..6th ............... day of .......No.Y.~lr-.bar.-....................-.......-., 19..$9., by the ~/(~ ~ /~...
following vote:
City Attorney
AYES: Tencer, Woolsey, $alshaw, Davis, Vice Mayor Sobel, Mayor Hilligoss
NOES: ~
ABSENT: Cavana
ATTES'T' : ............. .. .- .. ~ .~.......-_.........-................. 4
ity Clerk Mayor
Cbuacil File ............................--.....
CA 10-55 Res. No. ..8.9.-.3 X44......... N.C.S.
PROPOSAL
FOR
SALES TAX ENI~iANCEMENT AND INFORMATION SER-VICES
TO THE
CITY OF PETALUMA
SEPTEMBER 27, 1989
MUNICIPAL RESOURCE CONSU3LTANTS
TABLE OF CONT-EN'P:S.
1.. FOREWORD ................................ PAGE 1
2. PU.RPOSE....... ........................... PAGE 2
3. SCOPE OF SERVICE ........................ PAGE 3
4. STARS REPORTS & COROLLARY CONSULTING.... PAGE 5
5. TIMING .................................. -PAGE 8
6. QUALIFICATIONS .......................... PAGE 10
7. COMP.ENSATION .................. .... PAGE 11
8. CERTIFICATION OF CONFIDENTIALITY........ PAGE 13
9. SUMMARY & CONCLUSION .................... PAGE 14
EXHIBItTS
EXHIBIT A
QUALIFICATIONS AND REPRESENTAT'IV'E CLIENT LIST
EXHIBIT B
GENERAL PROVISIONS
O~RCFC`
M i ~~TJNICIP"AL RESOURCE CONSULTANTS
~ RC ~
A .partnership of John T. Austin, fnc. & Allen W. Charkow, Inc.
.ti~w Si~y
September 27, 1989
Mr. David Spellman
Finance. Of:f`cer
City of Petaluma
11 E-ng°lish Str.e~et
Petaluma, CA 9495`2
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7utte ~~~
We~tlak~ ~ illa~;e. L~ ~l:c~l
lsls> 991->'u
Cenfntl C~11t7irrrtlq
(209) 432.039
No-tkern Calijorrtia
(415) 838-1115
Re: Sales Tax Enhancement and Ln~fortnation Services
Dear Mr. Spellman:
Municipal Re.sour.ce Consultants ,(MRC) hereby proposes to
prowide self-funding sales tax audit"and information services
to the City of ..Petaluma;.. The purpose, scope, qualifications,
timing and compensation are set forth as follows:
1. FORE-WORD
The City of~ Petaluma, together with most of the other
cities in California, has been materially affected in
recent years by Proposition 13, economic recession,
State/Federal cutbacks .and. the 1986 Tax. Reform Act's
adverse impact. on the municipalbond market. With the
impending threat of more- fiscal hardship. and few
prospects for new revenue sources, it is vitally
'important that cities maximize revenue from existing
revenue sources.
Clearly, these fiscal changes have made sales tax .the
most.;mporta~nt revenue sources for almost all California
c.it.ie Fqr example, sales 'tax revenue for the City of
,Peta•1'uma comprises approximate y 3'9.6 of total General
Fund revenue (per Annual Report of Financial
Transactions., $tate•of California, 1987).
Mr. David Spellman
: City of Petaluma
September 27, 19;89
Page 2
Sales tax revenue has generally been taken for granted
with cities simply... accepting payments from the State
without question. However, for. the re sons discussed in
t~he.enclo_.ed MRC_Irisights newsletter (Volume 1, No.3), it
is not. .:uncommon for taxpayer rep.or.ting errors to cause
-the local amount of sales tax to be msallocated -- or
distributed in error -- to the state pool, county pool or
other jurisdictions.
The State Board .of Equalization is charged with overall
audit responsiYiilty. However, staffing is not adequate
to audit, all aspects of sales tax report"ing. The Board
concemt-rates primarily on auditing sales, tax collections
reported by th'e business. Very little audit takes place
with. regard. to "point-of-.safe" reporting, which results
in many c-tes ~be'ing subject to- distribution errors.
These misallocation errors ex'st because businesses
report sa-le's ~ tax according to their convenience, which
is not always consistent with point-of-sales regulations.
Furthermore, these errors are often difficult to detect.
Because misalloeations are not uncommmon, it is essential
that the, sales tax resource be audited to determine
whether the City is receiving alh of the sales tax
revenue to wh__ch it is entitled. It is also important
f:or th'e City. to know more about the businesses producing
its sales. tax revenue in order to monitor, analyze and
forecast their performance.
2. PURPOSE
Accord~ngly_, MRC °proposes to conduct an initial and
ongoing sales tax audit in order to detect and correct
point-of-sale .distribution errors and thereby generate
new. sales tax revenue for the City. It should be
emphasized that MRC's proposed -sales tax. audit
encompasses all City businesses and not just the major
companies
;Much. of the data developed as part of our audit service
'~ common to that required to perpetually monitor,
analyze aril forecast revenue from the sales tax resource
and pro~,d'e corollary consu-Ming servie'es designed to
maintain and enhance the City's revenue base. The Sales
TaX Analysis & Reporting System ('STARS) Reports and
Corol-lacy Consulting are presented under Section 4, on
pages 5 and 6. .
Mr. David Spellman
City o;f Petaluma
September 27, 1989
"Page 3
3. 'SCOPE OF` SERVICE
The scope of our proposed audit service includes, but is
not limited to, the following procedures and tasks:
o Procure a computer tape of sales tax permit records
from the State :Board of Equalization.
o Establish master file in STARS from tape data
provided in previous task.
o Input data from sales tax distribution reports
provided by State Board of Equalization for six (6)
most recent consecutive quarters..
o Develop a target- `l;st of potential point-of-sale
taxpayer reporting errors based on a comprehensive
inventory and evaluation of all businesses in the
City of Petaluma. These businesses are to be
analyzed based on proprietary guidelines established
by MRC, formulated through expert knowledge of
corporate mergers and acquisitions, sales versus use
tax, business marketing organization and :methods,
commercial sales tax reporting practices; and other
conditions contributing to reporting errors.
o Meet with designated •City official(s) to review
service objectives and scope.; MRC workplan schedule,
public relations and logistical matters (.e.g.,
temporary office space, telephone, photocopy,
receptionist, data sources, etc.). We will also
establish an appropriate liaison with the City's
coordinator and define logical checkpoints for
reviewing the proj`ect's progress'.
" ..Note: with the exception of this initial meet°ng~,
MRC''s.service requires no time or effort on the part
of City staff.
o Contaet each target business tq determine whether a
point-of-.sale reporting error exists.
Note.: this is accomplished with, the highest regard
to discretion acid professional conduct, as evidenced
by the fact that MRC's sales tax audits have
involved more than 100.,000 direct contacts with
t.axp'ayer businesses without a single complaint. Our
sales tax audits are predicated on a constructive
public relations approach which emphasizes the
"importance of each business. to the City and the
mutual benefits of correcting reporting errors.
Mr. David Spellman
City of Petaluma
Sept~einber 27 ,'` 1,989
Page 4
o -Provid;e to the City and State Board of Equalization,
reports addressing each point-of-sale. taxpayer
reporting error individual y, .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,
recommend'ed~ corrective procedure and., if available,
estimated.- sakes tax revenue which should be
forthcomnrg to the City of Petaluma.
i
o Receive and process sales tax distribution reports
quarterly.
o Coordinate with the taxpayer. and State Board of
Equalization to make the necessary corrections plus
retroactive adjustments. for. eligible amounts
'improperly distributed in pr.:ior quarters.
o Monitor and analyze the...,~quarterly distribution
reports. with audit focus on the following:
- Those accounts with previously reported
point-of-sale distribution errors to
ensure that the corrections are made for
current quarters plus retroactive
adjustments for eligib e amounts
improperly distributed in prior quarters.'
- Those major accounts comprising 90% of the
City's total sales:: tax revenue to identify
any irregularities (e,.g., negative fund
transfers, significant decreases, etc.)
and ensure that the City is not getting
less-than it is entitled.
- Those account's having a use tax
designation 'to ascertain why the tax is
being classified as u'se tax rather than
sales tax.
Mr. David Spellman
City of Petaluma
September 27; 1.989
Page 5
4. STARS REPORTS & COROLLARY CONSULTING
Much of the data developed as part of our audit service
is common to that "required to perpetually monitor,
analyze and forecast revenue from the sales tax resource
and" provide eoro lacy consul ing services designed to
maintain and enhance the City's revenue base. These
sere-ices are offered. in conjunction with MRC's audit
service.
The slope. of our STARS Reports and" Corollary Consulting
services includes,. but is not limited to, the following:
"STARS Reports (Sample Enclosed)
o Input data from sales tax distribution reports
provided Yiy State Board of Equa izaton for six (6)
most" recent consecutive quarters. (Note: This is
done to provide two benchmark years in the initial
.report to the City,i.e~., the four .quarters ending
two quarters aback, and the four quarters ending one
quarter back'. Amounts for the most recent quarter
are i_ ncluded in each STARS report, but are not used
.for benchmark purposes as many accounts are
incomplete'. due to late-paying businesses. Those
businesses that pay late miss the cutoff for the
State's quart"erly report of ales tax distribution,
which is the:, source of~the payment data used in the
STARS reports.)
o Receive .and.: process sales tax distribution reports
quarterly.
o Reo~rganze and refine our computerized sales tax
data for the City utilizing MRC's. Sales Tax Analysis
.and Reporting System (STARS).
o Erepare and submit STARS reports on a quarterly
basis principally focusing. on the major. sales tax
producers. Major sales tax producers are defined as
those businesses meeting or exceeding a specified
quarterly, revenue threshold and. comprising in
:aggregate 90~ or more of the sa"l.es tax revenue
generated from businesses Yocated in the City.
Mr. David Spel man
City of Retaluma
September 27, 198,9
Page 6
A11 .major sales tax producers 'and business categories .are
monitored and analyzed quarterly based on reports to
include the following:
- Manacrement :Summary & Charts.. Based on our analysis
and. evaluation of the STARS reports and other data,
each quarterly report includes a comprehensive
Management Summary. The Summary features a general
analysis regarding statewide trends that may affect
the C"ity's Sales tax plus a s,pecifie analysis of the
City' sales tax composition, changes and
performance, Twelve color• charts are included in
.each report to graphically illustrate the data .and
analysis presented in the Summary.. The Management
Summary `and Charts do not contain confidential
information and can therefore be distributed to key
Gity~-personnel and the City Council.
- Maj or (.and' Top 100 Sales Tax Producers. Ranks in
descending order according to level ~of sa es tax
_produced.
- Business Classification. Groups and ranks':major
producers by business classi°fication according to
level of sales tax produced.
- Sales T;ax Trend Reports. Indicates growth and
decline comparisons by various categories for
forecasting and. analysis..
- Geo-Codinet._ Tracks. sales tax performance within
specific areas of the city (e:.g., key shopping
centers, redevelopment project 'areas, downtown
business d"istricts, etc.:). Charts and printed
reports ar.e included for each geo-area. (Note:
Each client is entitled to at least one geo-area, at
no charge. If numerous geo-areas are desired, there
Y' ~ ~ q ~" e~ the City
man. be a nominal-char e. MRC will advis
in advance of any such charge,, which would be at
MRC''s• cost) .
- Status Report. MRC' cleans up addresses on all
pern-ts and. provides. a status report on all changes
t°o the sales tax files, thatB is_ equal y useful for
business tax enforcement. The report shows all new
p~erm,ts, address changes,., owner changes- and closed
permas and effectively replaces the yellow
registration cards that are cumbersom to use.
~Mr. David Spellman
City o_f; Petaluma
• September 27, 1989
Page 7
By comparing the' data which is in a clean address
order' with the business tax files, unlicensed
business can be identified and billed, or business
tax records can. be updated for new addresses. or
owners, or purged if c osed.
The "cleaned up" data from the: State Board of
Equalization can be transYferred to the City's computer
v:ia floppy diskette or 9-track tape if the City desires
to have the information for other purposes.
Corollary ConsultnQ
o Make specific recommendations (f,or City staff and/or
MRC) to.-further enhance the City's revenue base in
areas. such, as sales tax, use tax, property tax.,
business license tax, utility users tax:, franchise
tax :and defined economic development goals.
o Provide City employees with post-audit sales tax
orientation:
- Conduct technical seminar'on California's local
sales tax distribution. process.
- Train staff in the fundamentals of sales tax
auditing should the: C-ty desire to assume
responsibility, for future maintenance of local
retail accounts internally.
o Analyze T_ist of City's major sales tax producers in
order to assist the City in deyel,opng a public
relations `program to prevent. the loss of these
important.°busnesses.
o Profile for Economic Development/Community
Redevelopment and Chamber of Commer..ce personnel the
most economically. desirable/undesi-table types of
developments/business users and the reasons why.
o .Provide a list of businesses 1'ocated in. the City
that.are~not .presently producing sales tax to the
City of Petaluma, but .could be-through constructive
changes in `marketing and/or purchasing procedures.
o Assist in defining specific geographic areas for
.which the City would have an interest in knowing the
saes tax produced ~.{e.g., within. Community
Redevelopment Agency boundaries).
Mr. David Spellman
City of. Petaluma
September 27,-1989
Page 8
5. TIMING
we are prepared- to commence the- proposed service within
10 days following :receipt of City Council contract
authorization .and. :resolution designating MRC as the
authorized City Consultant to examine sales and use tax
records (see Exhibit C).
The preliminary workplan schedule (Figure 5-1) following
this page ,presents .the time frames envisioned for
a~ccomp'lishment of the .prescribed tasks. As indicated,
the initial field audit report identifying point-of-sale
taxpayer. reporting errors is normally provided within 60
to 90 workng'days following receipt of authorization.
The QDR audit reports are provided within 30 working days
following receipt of the quarterly. distribution reports.
with regard to the optional services, STARS reports are
provided on a quarterlybasis within 30 working. days
following receipt of the quarterly distribution reports.
The corollary consulting services are provided on ~an
ongoing basis in conjunction with the delivery of our
ongoing audit and STARS reports.
CIiY:
• SALES YAX ENHAl10EMENT 6 INfORliATICdi LERViCES CONTRACT DATE:
SCHEDULE Z PROGRESS CHART
{PRELIMINARY;)
HONiH 1 IMa1TN 2 ItSONTN 3 IM(blTb 6 (NORTH 5 IMONTN 6 It60T1TH T ItSOHTH 8 IMONTN 9 IMONTH lOIMONTH 11IkANTH 121MONTH 13,1
DESCRIPTION I -I -1 I• I I I ~ I I I_ ~ I
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. •Ix I I I Ip I I
I ~ I I I
CONTRACT; AITTHORIZATION I (
( i i i i i I~ I.
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REQUEST PERMIT LiSYING b• GUARTERCY,DIST.,REPORTS I ~ I~ `I
• I I I I I :, I
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DEVELOP TAitGET. IIST OF POTENTIAL MISALLOCATIONS . I I I__I I I I -I
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CONTACT EACH eustMES I _I I I I I-1 I----I I I 1---I I
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PREPARE, DELIVER Iy REVIEU UITN CITY;INi~IAL REPORT ( 'i i ix• i I I I I I I I I
IDENTIFTiNG MISALLOCATED p"CCOlA1TS ( I I~_L___I I
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I I _ « ----~S--a-3SLL2aLSGLiaIISaLLaII~IILral
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DELIVER ONGOING A I I I I -I ----_____
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pUARTERLY PROGRESS REPORTS I -I I I _I I I (
I I .
xxxx FULL TTME EFFORT
__-= PART TIME EFFORT AS REQUIRED FIGURE S - 1
PURSUE TO GONCLUSiON
Mr. David Spellman
City of~ Pet.a.huma
September 27, 1989.
Page 1.0
6. OUALIFLCATIONS
Based on a proven.. track record of-consistently impressive
results, MRC has established a reputation as the
undisputed leader, in providing. sales tax en ancement
services to~CaTifornia municipalities.
MRC's .sales tax, audits are producing, in aggregate, more
than $12 million annually in new sales tax income for the
cities we serve: Our audits have also resulted in the
detection 'and correction o.f. the largest recovery
adjustments ever made by the State Board of Equalization.
MRC's proposed service is .,automatically self-funding
because our compensation is cont-ingerit on. performance and
eri,trely derived from new income which would not
otherwise have 'been realized by the City. Unlike most
tax- audits, our service produces new revenue without
causing any additional tax liability for business.
California clients served represent a wide and varied mix
of cities with populations ranging' from less than 2,000
to mots than 7'OA,000, and annual sales tax revenue from
less than $2.50.,000 to more than $55 million.
Qualficat°ions and references are attached under Exhibit
A.
The uniqueness of our service and .significant results
achieved are directly attributable to our. employing
proprietary techniques. borne out of the principals'
combined 2'7 years of sales tax audit experience...
Mr. David ~~S:pellman
City bf Peta .uma~
September 2Z, 398'9
Page 11
7. COMPENS'ATLON
In order to. make the proposed services self-funding for
the City of Petaluma, NgtC's compensation for providing.
the initial and ongoing sales tax audits. and STARS
reports is entirely predicated and contingent upon; our
ability to produce new -sales tax revenue for the City,
further described as follows:
Sales .Tax Audit S:er-vice
MRC's compensation .for providing the audit service is 25%
of view sales tax revenue realized b.y,. the City as a result
of MRC identifying and correctng.the related point-of-
sa1e~ distribution error. Said 25'~ applies to each
correction for fund transfers and the first six
consecutive reporting quarters following completion of
.the audit by MRC ,and confirmation of corrections by the
State Board of Equalization.
Sales tax audit invoices are submitted quarterly after
the Gity has received, the revenue from the correction and
quarterly distribution report confirming it. Each
invoice is to include the business; name, permit number,
local allocation amount received by tYie"~ City and amount
due MRC. Invoices, are due and payable upon receipt.
STARS Reports
MRC proposes to provide STARS Reports- for $4,000 for the
first year, or $1,00:0 per quarter..,, payable only after
the City has received the quarterly STARS report(s) and
sufficient funds to cover the STARS, charges from the
City's 75$ share of new sales tax revenue. produced from
MRC's audit service. The following computation
illustrates a hypothetical example:'
New sales tax revenue .produced. 540,000
for City .from MRC audit service
Less MRC compensation for audit- -10,000
service @ 25
City'a share of new sales tax 5.30,000
revenue.@ 75~
Lesa STARS charge for full year - 4,000
@ $1,000 per quarter
26 000
Net new sales tax revenue to City ~~
after compensating MRC for audit
service and STARS reports
Mr., David S,pelaman
City o:f` Peta uma
September 2T, T989
Page i2.
Should MRC's audit service fail to generate sufficient
new sales tax revenue. for the City to cover the STARS
cha°rge out of the City's 75% share, then MRC. shall
absorb th.e shortfall amount.
Expenses
AT1 expeinses `incurred by MRC in providing the audit
service and STAR5 reports are absorbed by MRC. These
expenses include. items such as employee salaries and
benefits, insurance, airfare, auto rentals, meals,
lq,dging, .keypunching,computer processing, clerical,
communications (e-.g.,. personal meetings., telephone, mail,
e :c.j pho.tocopying, overhead and miscellaneous out-of-
pockets for' consumable supplies' and. research materials
such as maps,.d`rectories, etc.
Mr. David Spellman
City of: _Pet?aluma
September 2'7 , 1989
Page 13
8. CERTLFI'.CATION OF CONFIDENTIALITY
Section 7056 of the 'State of California Revenue and
Taxation code specifically limits the disclosure of.
confidential. taxpayer information contained in the
record's of the State Board of Equalization. This section
specifies the conditions under which a city may authorize
persons other than city officers and employees to examine
State Sales and Use Tax records (see sample resolution
attached under Exhibit C).
The following conditions specified in Section 7056 (b),
(1) of the State of California Revenue and Taxation Code
are hereby made part of this contractual agreement
entered into between the City of Petaluma and Munic.ipaT
Resource Consultants (Consultant).
A. Consultant is authorized by this agreement to examine
sales and use tax records of the Board of Equalization
provided to City .:pursuant to contract ,under the Bradley-
Burns Uniform Sales and Use Tax Law.
B. Consultant is required to disclose information
contained in, of 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. Consultant is prohibited from performing consulting
services for' a retailer during the term of this
agreement..
D. Consultant is prohibited frgm retaining the
information contained in, or derived. from,, those sales
and~use tax records, after this agreement..has expired.
Information obtained b:y examination of Board records
shall ,be °u'sed~ only for purposes relayed to collection of
local; sales and use. tax or for other governmental
fund°ions o~f the'' City as set forth .by resolution adopted
pursuant ~to Section 7056 (b) of the' Revenue and Taxation
Code.
The re's:oluton~ shall designate the Consultant as a person
authorized to examine sales and use tax records and
ceryify that this agreement meets -the requirements set
forth above and in Section 7056 (b~),(1) of the Revenue
and Taxation Code.
Consultant hereby certifies that any and al information
utilized. in the. conduct of work performed is to be.
'itil'ized• •onhy for those purposes authorized by the City
and by t°he Bradley-Burns Uniform Local Sales and Use Tax
Law.
Mr. David Spellman
City of Petaluma
September 27, 1989
Page 14
9. S.TrIIKARY & CONCLUSION
MRC's audit: and information services are designed~to
detect and 'correct point-of.-sale taxpayer reporting
errors- and thereby generate new sales tax revenue for the
City of Petaluma on~an ongoing basis.
The STARS reports provide the essential information to
monitor and analyze revenue from the sales tax. resource
and develop. a program for maintaining and enhancing the
City's revenue base.
MRC's audit and information services are automatically
self-funding because our compensation is contingent on
performance and~eritirely derived from new income which
would not :otherwise have been realized by the City.
Should. you 'h'ave any questions regarding the proposed
services or our compensation, we are prepared. to respond
promptly..
Should the. :City decide to use this proposal and the
general provisions. attached .under Exhibit B (which are
incorporated into this agreement.) as the contract,
please indicate acceptance by .returning an executed copy
to my attention. The original is for your records.
For your convenience, a sample memo 'and resolutions for
Council are attached under Exhibit C.
~ncere,ly,
,~ ~~~
C~Lowell V. Smith
ACCEPTED'
CTTY OF
Tit: C;ay Manager
Date>• / Y
ATT~ST'•
City C.l.erk
ACCEPTED FOR MiJNICIP,AL
RESOURCE CONSULTANTS.
By: 1U
ohn T. Austin, Inc..
T'tle: Partner
Da e• Se a 27 1989
Forr*i con ]~e ed)and approved:
_. ~ ,~- c
roved / ty At ne
J/l- .~/ -. 1~ ~/. /
nanc% ~'llirectbr
sib tiiana~er
EXHIBIT A
MUNICIPAL RESOURCE CONSULTANTS
QUALIFICATIONS & REFERENCES
GENERAL QUALIFICATIONS
Municipal :Resource Consultants (MRC) specializes in providing
°revenue enhancement services to California municipalities in
the a-yeas of s-ales tax, use tax,, business license tax,
property tax, utility users tax and franchise fees.
MRC's :revenue. enhancement services ase complemented by geo-
based management information systems and consulting in areas
such ~ as strategic planning, economic development and
redevelopment.
Given that revenue enhancement services are, by their nature,
performance-driven, MRC's compensation is based on the actual
results achieved.
PRINCLPALS
John T. Austin - Mr. Austin has been an economic development
and tax consultant 'to the public sector for more than sixteen
years, principally focused on state and local sales, use and
property taxes. He is a graduate of the University of
Southern California where he majored in business economics and
marketing.
Al1en.W. Charkow - Mr. Charkow has been. in municipal finance
for fifteen years, thirteen of which were in the capacity of
Director. He has, served in the California cities of Fresno,
Garden Grove,, Cypress and Sunnyvale.. He is a graduate of the
University of Santa Clara in the field of business management.
Mr. Charkow pioneered sales ~ tax audit and computerized
information systems- for sales tax analys-is on behalf of
Cali-fora-a cities:. He has also applied sales tax expertise to
enhance economics development projects as a key member of City
economic development teams.
AUDIT STAFF
MRC's audit staff has a working knowledge of sales/use tax
law.; State Board of Equalization administrative procedures,
tax-prepa~rer reporting pro'c'edures, and the mechanics of
sales/mar-ketng%distribution pr.act-ices, for manufacturers
engaged in business-to-business sales from within and outside
of California.
LEGAL COUNSEL
When MRC's clients have questions or issues< related to
sales/use tax law, they ~ are invited to utilize MRC's counsel
at no charge.
MRC's `co.unsel, Joseph A. Vnater, is a partner in the
Whittier law firm of 'Bewley, Lass.leben & Miller.wher.e he
specal;z:es in matters of California, state and local taxation,
including sales and use tax,. franchise/income tax and property
tax. `Mr.. Vinatieri is former deputy to Honorable Ernest J.
Drorienburg, Jr. , and member of the Calif`o-rnia State Board of
Equalization wh8re he was responsible for preparation of
franchise%income tax, property tax and s°ales and use tax cases
to be heard by Judge Dronenburg. He was also responsible for
legs atve, administrative and poh,tical liaisons. Mr.
Vinatieri received his B.A. degree, cum laude, from
Westminster College and his J.D. 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 a .member of -the: Tax Section'of the California State Bar.
He is also a member of the Lnstitute of Property Tax for which
he .has spoken nationally. Mr. Vinater has .also spoken for
the California Certified Public Accountant.Foundation, as well
as other professional groups on topics relating to his
practice.
REPRESENTATIVE CLIENTS - SALES TAX ENHANCEMENT SERVICES'
MRC has been providing sales tax enhancemer-t services to
California municipalities wince 1978. Misallocations.detected
and corrected during that 11-year period are producing, in
aggregate, more than S12 million annually in new sales tax
income for the cities served..
The misallocations detected and corrected by MRC have also
resulted in 'the larges recovery adjustments ever made by the
State Board of Equalization.
California cities served by MRC represent a wide and varied
m'ix, with. populations ranging from less than 2,000 to more
than. 70'D,OOQ~ and annual sales tax income from.. less than.
$2`.50;,00;0 to more than $55 million.. A representative ..list of
NB2C,clients is provided on the following page.
In order•~ to better serve our client base, which is evenly
split between .Northern. and Southern California, audits are.
staffed 'out of our_-San Ramon and Westlake Village offices,
with data processing support and analysis from our office
located in Fresno (Madera).
REPRESENTATIVE LIST OF MRC CLIENTS
NORTHERN CALIFORNIA
(Population over 2.50,000)
City of Oak-land
One City Ha1,1 P~1aza
Oakland; CA. •.946=12
Contact: Mr. Larry Lubran
City of Sacramento
915 I Street, #1D4
Sacramento; CA 95814
Contact: 'Mr. Michael L, Medema
City o~f ±Sa~n Jose
801 N. First Street;, #.2.27
San Jose, CA 95110
Contaetc Ms. Deborah Kelly
(415) 273-3084
(916•) 449-5.724
(408) 277-4288
(Population from 100,000 to 250,000)
City of Concord
19 5'0 Par- ks;de Drive
Concord, CA 945'19
Contact: \Ms. Karma Ruder (415) 671-3078
City of Santa Rosa
100 Santa. Rosa •Avenue.
Santa Rosa., CA 954:02;=1678
Contact: Mr. Ronald L. Bosworth (70.7':) 576-5315
City of Sunnyvale,
65"Q W . O,l ve Avenue
Sunnyvale; CA 94086-370.7
• Contact: Ms. Amy Chan (40.8) 730-73'98
• .(Population froth 50,000 to 100,000')
City of Antioch
P . O,c Box 13;0
Antioch; CA 9'4.509
Contact: Mr. Roy Poettner (415) 778-09..52
City of .Danv le
510 La.Gond"a.Way
_
Danville, CA 94526
Contact: Mr. Tom Hansen (415) 820-633'7
City of Palo ,Al:to
250 Hamil'ton,Avenue
Palo Alto,; ,CA 943'0.1
Contacts: Ms. Emily Harrison
Mr. Mike. Northrup (415) 329-2533
City of Redwood City
P. O. Box 391
.Redwood City; CA 9:4;064.
Contact: Mr. Gul Ramch'andani (415) 780-7071
City of San, Mateo
330 W. 20th Avenue
San Mateo, CA 94403
Contact: Mr. John L. deRussy (41.5) 3'77-3400
City of Santa Clara
15:00 Warburton Avenue
Santa Clara, CA 95050
Contact: Ms. Kristin Machnick (408) 9'.84-3261.
City of .South San Francisco
315 Maple Avenue
South S'an Francisco, CA 9.4083
Contact: Ms. Pauline Marx (415) 877-8507
City of Walnut Creek
1666 No. Main Street
Walnut :Creek, CA 9,4596
Contacts: Ms. Arlene Alperin
Mr. Rod Gould (415) 9:4,3-5820
(Population less than 50,000)
City of Campbell
70 N. First Street
Campbell, CA 95008
Contact: Mr, Geoffrey Whittaker (408) 86'6-2111
City of Cupertino '
10300 Torre Avenue
Cupertino, CA 95015
Contact: Mr: Blaine Snyder (4;08) 252-4505
City of Menlo Park
701 Laurel Street,
Menlo` Park, CA. 9.4'02'5
Contact:- Mr. Russ S'cotten (415) 858-3362
C',ty of San, `Bruno
_ 567 E1 Cam`no `Real,
San Brurio, CA ~ 94066
Contact: Ms~. Molly Smith (415) 877-88.80
City of San Rafael
1400 Fifth-Avenue:
Sa'n Rafael, CA 94°915
Contact..: Mr. Ransom Coleman (415) 485-3060
City of Uni.on~-:C'ity
34009 A_lvarad~o=NiterRoad
Union City, . CA 945'8-7.
Contact: Ms. Zenda James
(415) 471-3232
Ci-ty of West Sacramento
P. O. Box 802
West Sacramento, CA 95691
Contact: Mr. Leigh Keicher (91°6) 3`73-5816
SOUTHERN CALIFORNTA.
(Population over 250,000)
City o`f Long Beach
333 W: Ocean Bouleva~,~rd,
Long Beach, CA 90802
Co.nt;acts: 'Mr: James Alge (213) 5;90-6024
Mr. Tony Walstrum (213) 590-6169
City of &anta Ana
20 C'iv'ic Center Plaza
Santa Ana., CA 92701
Conta~c~ts;: Mr: Rod Col~oma
Mr. Sid Yeates -" (714:)'647-5422
(Population from 100.,000 to 250,000)
City of Bakersfield
1501 Truxtu•n Avenue
'Bakersfield, CA 9=3301
Contact: Mr.~~Greg Klmko (,805). 326-3742
City of Fullerton
303 W. Commonwealth
Fullerton, CA 9263:2
Contact: Ms.. ,Barbara- Henderson (714) 73'8-6520
City, o~f `Riverside
3'9;0,0 -Main, ;Stree;t
92522
Riverside;, CA
.
Contact: Ms. Barbara Steckel (.714) Z'82-5660
City of San -'Be°rnardno .
300 North, '!D!` Street
San `Berna~rd~ino, CA 92418
Contact: Mr. Andrew Green (714`) 38`4-5242
City of Santa Clarta
23`92,0 'Valencia -Blvd.
.Santa Clarit'a,~ CA. 913'55
Contacts:: Ms: Andrea°Daroca
'Ms.. Terri Maus (408) 4.:29-3589
City of Tor-ra_nce ~ '
3031 Torrance S<Yvd:.
Torrance, CA. 90503
Contacts: Ms,.~Mary Giordano
'Mr. Ben Murdoch
(213) 618-5855
(Population from 50,000 to 100,000)
City of, Irvine
17200 J'amb'oree Road
Irvine, CA 9271.3 714) 660-36:20
Contact: Mr. Jeffrey E. Niven
City of Santa Monica
1685 Main Street
Santa Monica, CA 9°Q401 213 4'58-82.81
Contact: Mr. Ralph 'Bursey ( )
City of South Gate
8650 California :Avenue
South Gate, CA 90280
Contacts: Mr. Ken Flewel yn 213 563-9525
Mr. Ken Hammon. ( )
City of yentura
501 Poli Street
Ventura, CA 9300'2' g05 654-7855
Contact: Mr. Everette Garmon ( )
(Population less than 5.0,000)
City of Brea
Number One Civic Center Circle
Brea,.CA 92621 714) 990-7675
Contact: Mr. John Stark (
City of Corona
815 W. 6th Street
Corona, CA, 9,1718-094:0 714) 736-2376
Contact : ~Mr°, John Gr-indrod
City off Cu_Tver City
P. O. B'ox. `507
Culver City, CA 90232
Contacts: Ms. Sue McCabe 213} 202-5757
Mr. Eric Shapiro
City. of Fontana
P . O . Box 51'&
Fonta_na,,CA 923:3':5 ~ 714) .350-7666
Contacts ; Mr. Rodger Neve
City of: La, Habra`
P. 0, Box 33T'
La Habra, CA 906.3`3 213 9'05-9729
Contact.: M_s. Sara Morris ( )
City bf:Manha_ttan Beach
1400~Highland Avenue
Manhattan Beach, ~.CA '9'0'266
Contact: .Mr. Merle Lundberg
City of S^anta Fe Springs
11710 Telegraph Road
-Santa Fe Springs,, CA 90670
Contact: Mr. Donald A.-Nuttall
City o.f 'Tustin
300 Gent'ennial Way~~
Tustin, CA •926"80,
Contact: Mr. Ronald A. Nault
(21.3) 545-5'621
(21'3:.) 86:8-0511
(714) 5'44-'8890
EXHIBIT .3
GENERAL PROVISIONS
1. Independent Contractor. At al,l times during the term
of this Contract, Municipal Resource. Consultants (Consulta-nt)
shall be an Independent Contractor and shall not be an
emgToyee of the City of Petaluma (City). City shall have the
-right to control Consultant only ~nso:far as the results of
Consul'tant's services rendered pursuant to this Agreement;
however, City sha'1.1 not have the 'right to control the means by
which :Consul-tant accomplishes services rendered pursuant to
this .Agreement.
Z. Liabil.tu. City shall not. be called upon .to assume
any liability for direct payment of any salaries, wages, or
other c'ompensatori to any Consultant personnel or
subcontractor performing services hereunder for City, or .any
liabi ity other than,. provided for in this Agreement.
City shall not be T;ab,le for compensation or ~ indemnity to any
Consult-ant. empl:oye`e or subcontractor for injury or sickness
arising out of ti~s/her employment, or for any negligent
actions of the Consultant or its employees.
A11 persons, employed in the performance of such services and
functions shall be employees of Consultant, and as such shall
not, for any purposes, be considered employees of City and
therefore shall,~have no right to any City service, civil
service, or other-City status.
3. Subcontracts. Any ~su~bcontracts entered into by
Consultant •for~.services to be rendered towards the completion
of COnsultant,'s portion of this Agreement shall be for
Consultant's benefit alone, and as such shall be its
re possibility with no liability resting on the City.
Consultant agrees to provide a list of all subcontractors to
be used in connection .with services to be rendered toward the
eompl.et~ion of its portion of this Agreement to the City within
ten .(TOj working days of execution of this Agreement.,
4. Licenses: Permits, Etc. Consultant represents and
war=rants.. 'to .C'ty that he has all licenses,, permits,
qualifications and approvals of whatsoever nature which are
le all.; re _red for ~Corisultant to .practice his profession.
4 Y ~`
Consultant represents and warrants to City that Consultant
shall,, at his sole cost and expense, keep in, effect `or obtain
at, all times dur-ng the term of this Agreement any licenses,
p~erinits', a'nd approvals which are legally required for
Consultant to practice his profession.
GENERAL PROVISIONS
PAGE 2
5' Time. Consultant °shall devote such time to the
performance of'services .,pursuant to this 'Agreement as may be
reasonab y necessary '.for satisfactory performance of
Consul aria's obligations pursuant to this Agreement. Neither
party shall be considered in default.o'f this Agreement to the
extent performance prevented or delayed by any cause,
present or future., which is beyond the reasonable control of
the party.
6. Insurance.
(a) Pubhic Liabili;tY_`. During the term of this
Agreement, Consultant shall maintain in
full force and effect .a policy of public
liability insurance `with minimum coverages
as . follows: $1, 000', 000 for injury to one
person in any one occurrence; $1,00.0,000
. aggregate; arid, $50:,000..00 f;or property
damage. Consultant shall cause the City,
its officials. and employees to be named on
all liability policies described above as
insured as respects: (:,1) activities
performed for the City by or on behalf of
the named insured, (2) products and
completed operations of the Named Insured,
and (3) premises owned, leased or used by
the Named Insured.
(b) Worker's Combensati°on. During the term of
this Agreement, Consultant shall fully
comply with 'the terms of the law of
California concerning worker's
compensation. 'Saiel~ compliance shall
include, but not be limited to,
maintaining in full force and effect one
or more policies of` insurance insuring
against any liability Consultant may have.
for worker's compensation.
7•. Consultant:. Not Agent. Except.. as City may; specify
in wr-ting; Consultant shall have no authority, express or
implied to act on behalf of City of any capacity whatsoever as
an agent. Consultant shall have no authority; express or
implied;, pursua°nt to this Agreement to bind City to any
obligation whatsoever.
`8. Assignment Prohibited.. No party to this
Agreement. may a sign any right or obligation ,pursuant to this
agre`ement., Any attempt of purported assignment of any right.
or obligation pursuant to this Agreement shall be void and of
no effect. ..
GENERAL `PROVISIONS
PAGE 3
9. Personnel. Consultant sha'11 assign only
competent personnel .t'o perform services pursuant to this
Agreement. In the event that C"ity, in its sole discretion, at
any time during the term• of this Agreement, desires the
removal of: any person or persons assigned by Consultant to
perform services pursuant to this Agreement, Consultant shall
remove. any .such person 'immediately upon receiving notice from
City o'f the de"sire of City for the removal of such person or
persons. '
10. Standard of Performance. Consultant shall
perform a1I services required pursuant tb this Agreement in
the manner and according to the_ standards observed by a
competent practitioner of the profession in which Consultant
is engaged in the geographical area in which Consulta"nt
practices his profession: .All products of whatsoever nature
which Consultant delivers to City pursuant to this Agreement
shall -be prepared in a substantial, first class and
workmanlike manner and •conform to the standards of quality
normally observed by a person practicing in Consultant's
profession.
11. Cit Re resentative. The City Manager or his
designee is t~tie repre en'tative of the. City and, will administer
this Agreement for the City.
12,. Termination. This Agreement may terminate. on
ten ('10) days written notice by either party, or within. such
time as both parties ;may find .necessary tq conclude the work
currently under way and'•to summarize Consultant's findings for
City.
13. Indemnity and Hold Harmless. Consultant shall
assume the defense of and indemnify and sage harmless, the
City, its officers, employees, and agents, and each and every
one bf them, from and against all actions, damages, claims,
losses_or expenses of every type,. and description to~which they.:
.may be su_b,j,ected or put, by reason of, or resulting from,. the
.performance of .the. work, provided that such action, damage,
c "aims, loss, or expense is attributable to bodily injury,
sickness,, disease or death, or to injury to, or-destruction of
property., :whether upon or off the work, including the loss of
use thereof;, and is cau's'ed in whole or in part by any
negligent act or omission of the Consultant; and'
subcontractor,anyone directly or indirectly employed-by any
of them or a'nyon$ fo"r whose acts any of •them may be liable,
whether or not it is caused in part by a party indemnified
hereunder. •
GENERAL P,ROVI:SIONS
PAGE 4
14:. Equal Emp.loyment OpportuntV: During the
performance of this Agreement, Consultant, for itself, its
assignees and successors in interest, agrees as follows:
a. Compliance With Regulations: Consultant shall
comply with the Executive. Order 1124;6 entitled "Equal
Employment gpportunty,: as labor regulations (41 C.F.R. Part
60), hereinafter referred to as the "Regulations."
b. Nondiscrimination: Consultant, with regard to the
work performed by it after award and prior to completion of
the work pursuant to this Agreement, shall not discriminate on
the ground of race, color, religion, sex or national origin in
the selection and, retention of subcontractors, including
procurements of materials and leases of equipment.
C". SOllC1L3Ll~n Lvr. ouuc:~iicia~,.wL . lll~.1~.~.111~
Procurements of "Mater'ials and' Eaut~ment: In all solicitations
either by competitive bidding o'r negotiations made by
Consultant for work to. `be performed under any subcontract,
including procur-ements of materials or equipment, such
potentia'1 subcontractor- or supp;l,er shall be notified by
Consultant. of: Consultant's obligation under this Agreement and
the Regulations relative to nondiscrimination on the ground of
race,. color, religion, sex or national origins.
d. In'formation_and Reports,:' Consultant shall, provide
all information and reports required by the Regulations, or
orders and, instructions issued pursuant thereto, and will
permit access to its books, records., accounts, other sou-ices
of information and its `facilities as may be determined by the
City to be pertinent to ascertain compliance with such
Regulations,, orders and instructions.. Where any information
required o:f Consultant is in the exclus=ve possession of
another who fails or refuses to furnish-this information,.
Consultant shall so certify to the City and shall set forth
what efforts it has made to obtain the information.
e;. Sanctions for Noncompliance: In the event of
nondiscrimination
noncompliance by. Con"sultant with the
provisions; o.f this Agreement, the City shall impose such
contract sanctions as, it may determine to be appropriate,
including, but not limited to:
~(S) W.;thholding o'f payments to Consultant under the
contract until Consultant complies;
('2`) -eancelTation, termination, or suspension of the
Agreement, in whole or in part.
GENERAL PROVISIONS
.PAGE 5
f'.~ Incorporation of Provisions: Consultant shall
include the ~provis:o,ns of paragraphs a through e in every
subcontract, including Regulations, order, or instructions
issued pursuant thereto. Consultant shall take such action
with respect to anyRegulations, order or :instructions issued
pursuant thereto. Consul ant shall take such; action with
respect to any subcontract or procurement as the City may
direct as a~ means of enforcing such provisions, including
sanctions for •noneomplance; provided, however, that in the
event Consultant becomes involved in, or is threatened with,
litigation with a subcontractor or supplier as a result of
such direction., Consultant may request City to enter such
litigation to protect the interests of the City.