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CI'V OF SAN BERNARDOO - REQUIIOT FOR COUNCIL AC'QoN
From: Warren A. Knudson
Subject:
Obtaining Sales Tax Audit From
Municipal Resource Consultants
Dept: Finance
Dlte: February 26, 1987
Synopsil of Previous CouncillCtion:
None
Racommended moti,on:
1. Authorize the transfer of $2,750 from account number 001-092-53706
(Medicare Benefits) to account number 001-121-53150 (Professional/
Contractual Services - Finance Department).
2. Adopt Resolutions
tJ,
CY. <-
Signlture
Contact person:
Warren A. Knudson
Phone:
5242
Supporthlg date ltt8Chld: Yes
Wlrd: All
(Professional/Contract. Svcs,
Amount:-.-J2,750 1986-87 Source: Finance) 001-121-53150
~J. ,. ~ ~_'
Finance: Ir " ~ -
FUNDING REQUIREMENTS:
Council Notes:
75-0262
Agenda Item No. -.:J~
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CI,o OF SAN BERNARDI.:b - REQUEQ FOR COUNCIL ~N
STAFF REPORT
Sales Tax revenue to the City of San Bernardino in fiscal year 1986-87 is
estimated to be $17.9 million, This represents the City General Fund's
largest single source of revenue or about 37% of total General Fund revenue.
City Sales and Use Tax is based on a proportional one percent tax rate
applied to all taxable sales within the City limits, The remaining portion
of the 6 percent tax rate is divided between the State (4-3/4 percent) and
the County Transportation Fund (1/4 percent). The major exemptions from the
tax include food ,purchased for home consumption and services. The local
Sales Tax is administered and collected by the State Board of Equalization
and is authorized by the State Revenue and Taxation Code Sec. 6001 - 9273.
City staff has recently become aware of the consulting firm of Municipal
Resource Consultants. This firm is unique in California in that they are
experts in State Sales Tax who perform "Point of Distribution"audits. These
audits assure that Sales Taxes are properly allocated within the County, The
firm also assists the City staff by providing computer generated Sales Tax
information. Municipal Resource Consultants have provided this unique service
to other California cities such as Long Beach, Riverside, San Jose, Santa Ana,
San Mateo and Bakersfield. They consistently receive high marks from these
other cities in terms of professionalism and results. In Long Beach, for
example, annual Sales Tax revenues increased approximately $500,000 as a
result of the MRC services, Comparable figures in other cities were San Jose
$600,OOO~ Bakersfield and Santa Ana $400,000 and San Mateo $250,000. The 11RC
audit scope would encompass all City business and would,thus be comprehensive
in nature. Further, Finance staff would also be involved so that on-going
audit procedures can be established.
Officials in the referenced cities have been contacted and they have been
pl eased ~/ith the servi ces provi ded by 1.1RC, MRC' s efforts resulted in addi,-
tional Sales Tax revenues and enhanced City staff's ability to monitor and
estimate Sales Tax activity.
Cost - 11RC has two pricing alternatives, both of which are contingent upon
additional Sales Tax revenues obtained for the City.
1. 35% of additional Sales Tax revenue obtained for the City, The
35% applies to any back quarters and the first six consecutive
reporting quarters following completion of r'IRC audit (and con-
firmation by the State).
2. a) 25% of additional Sales Tax revenue obtained for the City.
The method of determining the amount is the same as pre-
viously noted.
b) $9,000 annually for a Sales Tax Information services system
which provides quarterly reports which include Sales Tax
information by business and category and trend information
as outlined in item 4 of the attached proposal (pages 5,6,
and 7),
75.0264
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STAFF REPORT
FEBRUARY 26, 1987
PAGE 2
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Staff recommends that the second alternative be adopted, This alternative
would cost less if any additional Sales Tax over $90,000 is identified.
According to the results confirmed by other cities, the additional revenues
would be expected to exceed that amount. The additional Sales Tax infor-
mation has proven to be beneficial in the cities that have been contacted.
1986-87 costs would be approximately $500 to obtain a tape of Sales Tax
permit records from the State Board of Equalization and one quarterly payment
of $2,250 for the additional services. The amount of $2,750 is available
from account number 001-092-53706 which contains $65,000 which was budgeted
to fund the City's portion of l<landated to\edicare contributions. The entire
amount that was budgeted for that purpose will not be 'utilized. With the
approval of this agenda item, $2,750 will be transferred from that account to
the Professional/Contractual Services account in the Fi,nance Department
budget, The remaining cost for the service for 1987-88 of $6,750 will be
included in the upcoming budget.
John Austin of Municipal Resource Consultants will be present at the March 9
meeting of the Mayor and Common Council to further explain the services to'
be provi ded.
Staff recommends that the following actions be taken:
1, Resolution designating Municipal Resource Consultants as the
authorized City representative to examine Sales and Use Tax
records and designating the Director of Finance and Internal
Auditor 'as City officers authorized to receive these records,
2, Resolution authorizing the execution of an agreement with
tlunicipal Resource Consultants to provide Sales Tax audit and
information services.
3, Authorize the transfer of $2,750 from account number 001-092-53706
(Medicare Benefits) to account number 001-121-53150 (Professional/
Contractual Services - Finance Department),
,
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO DESIGNATING
MUNICIPAL RESOURCE CONSULTANTS AS THE AUTHORIZED CITY
REPRESENTATIVE TO EXAMINE SALES AND USE TAX RECORDS, AND
DESIGNATING THE DIRECTOR OF FINANCE AND CITY AUDITOR AS THE CITY
OFFICERS AUTHORIZED TO RECEIVE INFORMATION CONTAINED INr OR
DERIVED FROM, THE SALES AND USE TAX RECORDS.
~E IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
SECTION 1. Recitals.
A. Pursuant to California Revenue and Taxation Code Section
7200, et seq., the City of San Bernardino adopted San Bernardino
Municipal Code Chapter 3.56 which adopts a sales and use tax
ordinance which imposes a tax and provides a measure therefor that
can he administered and collected by the State Board of
Equalization using the same and existing statutory and
administrative procedures followed by the State Board of
Equalization in administering and collecting the California State
Sales and Use Taxes.
B. Pursuant to California Revenue and Taxation Code Section
7056, the City of San Bernardino, by resolution, may designate any
officer, employee or 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.
C. The City of San Bernardino has entered into an agreement
for sales tax audit and information services with the firm of
Municipal Resource Consultants, a partnership of John Austin and
Allen Charkow, and, pursuant thereto, desires to designate John
Austin and Allen Charkow of Municipal Resources Consultants as
authorized City representatives to examine such .sales tax records
maintained by the Board on behalf of the City of San Bernardino.
2/26/87
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D. All legal prerequisites prior to the adoption,of this
resolution have occurred, including the requisite assurances of
confidentiality of all records reviewed.
SECTION 2. Implementation.
A. The Mayor and Common Council of the City of San
Bernardino hereby certify to the State Board of Equalization that
John Austin and Allen Charkow of Municipal Resource Consultants
are the designated representatives of the City of San Brnardino 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 of San Bernardino.
B. Pursuant to California Revenue and Taxation Code Section
7056 (b), the Mayor and Common Council hereby certify that
Municipal Resource Consultants, a partnership of John Austin and
Allen Charkow, (hereinafter referred to as "Consultant") meets all
of the following conditions:
(1) Consultant has an existing contract with the City to
examine sales tax records;
(2) Consultant is required by that contract to disclose
information contained in, or derived from, those sales tax records
only to an officer or employee of the City who is authorized by
resolution to examine the information;
(3) Consultant is prohibited by the contract from
performing consulting services for a retailer during the term of
the contract; and
(4) Consultant is prohibited by the contract from
retaining the information contained in, or derived from, those
sales tax records after the contract has expired.
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2/26/87
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C. Pursuant to Revenue and Taxation Code Section 7056, the
Director of Finance and City Auditor of the City of San Bernardino
,
are designated as the City officers authorized to receive disclosu es
from Municipal Resource Consultants of information contained in,
or derived from, the sales and use tax records.
SECTION 3. Certification. The City Clerk of the City of San
Bernardino is hereby authorized and directed to certify to the
adoption of this resolution.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a
meeting thereof, held on
the
day of
, 1987, by the following vote,
to wi t:
AYES:
Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is hereby approved this
day
of
, 1987.
Mayor of the City of San Bernardino
Approved as to form:
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2/26/B7 -3-
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE
EXECUTION OF AN AGREEMENT WITH MUNICIPAL RESOURCE CONSULTANTS, A
PARTNERSHIP OF JOHN AUSTIN AND ALLEN CHARKOW, TO PROVIDE SALES TAX
AUDIT AND INFORMATION SERVICES.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
SECTION 1. The Mayor of the City of San Bernardino is hereby
authorized and directed to execute on behalf of said City an
agreement with Municipal Resource Consultants, a partnership of
John Austin and Allen Charkow, to provide sales tax audit and
information services, a copy of which is attached hereto, marked
Exhibit "A" and incorporated herein by reference as fully as
though set forth at length.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a
meeting thereof, held on
, 19B7, by the following vote,
the
day of
to wit:
AYES:
Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is hereby approved this
day
of
, 1987.
Approved as to form:
~~C~
City ttorney
Mayor of the City of San Bernardino
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A G R E E MEN T
---------
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(Sales Tax Audit)
THIS AGREEMENT is entered into this
day of
, 19B7, between the CITY OF SAN BERNARDINO, a
municipal corporation, referred to as "City," and MUNICIPAL
RESOURCE CONSULTANTS, a partnership, consisting of John Austin and
Allen Charkow, referred to as "Consultant."
City and Consultant agree as follows:
1. Consultant shall perform a comprehensive sales tax audit
of the local sales tax administered and collected by the State
Board of Equalization and provide information services designed to
identify and correct point-of-sale distribution errors and, thereby
generate new sales tax income for the City on an ongoing basis.
Consultant shall provide said auditing and information services as
specified in Consultant's Proposal dated February 17, 1987. A
copy of said proposal is annexed hereto as Exhibit "I" and
incorporated herein by reference.
2. This agreement may be terminated upon ninety (90) days
prior written notice by either the Consultant or City. The
Finance Director is hereby authorized to give such notice on
behalf of the City.
IN WITNESS WHEREOF, the parties have hereunto executed this
agreement on the day and year first above written.
CITY OF SAN BERNARDINO
ATTEST:
By
,
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Mayor
City Clerk
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2/26/87
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1 MUNICIPAL RESOURCE CONSULTANTS,
a partnership
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4 Partner
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6 Approved as to form:
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8 ty torney
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2/26/87
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M UNICIP A~ESOURCE C()lSUL T ANTS
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32123 W. Lindero Canyon Rd.
Suite 209
Wesllake village, CA 91361
(818) 991-5220
9874 Teaparty Lane
Fresno. CA 93710
(209) 432-8039
February 17, 1987
Mr. Warren A. ICnudson
Finance Director
city of San Bernardino
300 North D Street
San Bernardino, CA 92418
Re:
Sales Tax Audit and Information Services
Dear Mr. ICnudson:
Municipal
provide a
the City
errors.
Resource Consultants (MRC) hereby proposes to
professional service to recover sales tax income for
of San Bernardino unrealized due to distribution
1. FOREWORD
The City of San Bernardino, toqether with most of the
other cities in california, has been materially affected
in recent years by Proposition 13, economic rece..ion and
the State/Federal cutback.. With the impendinq threat of
more fiscal hardship and few prospects for new revenue
sources, it is vitally important that cities maximize
income from existinq revenue source..
Clearly, these fiscal chanqes have made sale. tax the
most important revenue source for almo.t all California
cities. For example, sale. tax revenue for the City of
San Bernardino comprises approximately 36' of total
General Fund revenue (per Annual Report of Pinancial
Transaction., State of California, 1985).
Sales tax revenue has qenerally been taken for qranted
with cities simply acceptinq payments from the State
without question. The complex reportinq format and
distribution process are larqely re.ponsible for this
condition.
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Mr. warr.n A. KnuQson
City of' San B.rnardino 0
F.bruary 17, 1987
Page 2
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Th. Stat. Board of Equalization 18 charq.d with ov.rall
audit r.sponaibility. How.v.r, statting is not ad.quat.
to audit all asp.cts of .al.s tax r.porting. Th. Board
conc.ntrat.s primarily on auditing sal.s tax coll.ctions
r.port.d by the bu.in.... V.ry little audit tak.. plac.
with r.gard to "point-of-.al." r.porting, which r..ult.
in many citi.. b.inq subj.ct to di.triJ::Iution .rrors.
Th... mi.allocation .rror. .xi.t b.cau.. bu.in....s
r.gi.t.r for .al.. tax p.rmit. according to th.ir
conv.ni.nc., which i. not alway. con.i.t.nt with point-
of-sal.. r.qulation.. FUrth.rmor., th... .rror. are
oft.n difficult to d.t.ct.
B.cau.. mi.allocation. are not uncommon, it i. ....ntial
that the .al.s tax r..ourc. b. audit.d to d.t.rmin.
whether the City i. r.ceiving all of the .al.. tax incom.
to which it i. .ntitl.d. It i. al.o important for the
City to know more about the bu. in..... producing its
sal.s tax incom. in ord.r to monitor, analyze and
for.ca.t th.ir p.rformanc..
2. PURPOSE
AccordinqlYr we propo.e to conduct an initial and ongoing
sal.s tax audit in ord.r to id.ntify and correct point-
of-.al. distribution .rror. and th.reby gen.rat. n.w
sal.. tax incom. for the city. It .hould be empha.iz.d
that KRCI. propo..d sal.. tax audit .ncompa.... All City
bu. in..... and not ju.t the major firm..
Ancillary s.rvic.. d..iqn.d to furth.r .nhanc. the City's
r.venu. ba.. are off.red a. option. to .ach of KRC I S
audit cli.nt.. Th... Optional S.rvice. are cov.r.d
und.r Section 4, on page. 5 and 6.
I
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Mr. Warren A. KnUd.on~
city ot San Bernardin..,.,
February 17, 1987
Page 3
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3 . SCOPE OP SERVICE
The .cope ot our propo.ed audit .ervice include., but is
not limited to, the tollowing proc.dur.. and ta.k.:
o Procure a computer tap. ot .ale. tax permit records
trom the state Board ot Equalization Conly the City
can order this tap. which co.t. about $500).
o Input data trom sal.. tax di.tribution reports
provided by State Board ot Equalization tor IIIOst
recent cons.cutive quarter..
o Develop a target li.t ot pot.ntial point-ot-.ale
di.tribution .rror. ba..d on a compreh.n.iv.
inventory and .valuation ot all bu.in..... in the
City ot San Bernardino. Th... bu.in..... are to be
analyz.d ba..d on propri.tary guid.line. ..tabli.hed
by MRC, tormulated through .xp.rt knowledge ot
corporate m.rg.r. and acqui.ition., .al.. v.r.us u.e
tax, bu.ine..mark.ting organization and m.thod.,
comm.rcial .al.. tax r.porting practic.., and oth.r
conditions contributing to r.porting .rror..
o Contact each target bu.ine.. to d.t.rmin. wh.ther a
point-ot-sale distribution .rror .xi.t..
Note: Thi. i. accompli.h.d with the highe.t r.gard
to di.cretion and prote..ional conduct, a. .vid.nc.d
by the tact that MRC'. .ale. tax audit. have
involved more than 40,000 dir.ct contact. with
taxpayer bu.ine..e. without a .ingle complaint. Our
sale. tax audit. are pr.dicat.d on a con.tructive
public relation. approach which empha.iz.. the
,importance ot .ach bu.ine.. to the City and the
mutual benetits ot correcting r.porting errors.
o Provide to the City, tor submission to the local
ottice ot the State Board ot Equalization, reports
addressing each point-ot-.ale di.tribution error
individually, including the bu.ine.. name r addres.,
telephone number, Calitornia .ale. tax p.rmit
numb.r, individuals contacted, date(.) ot contact,
nature ot busin..., reason C.) tor error, recomm.nded
corrective proc.dure and, it available,e.timated
sale. tax income which .hould b. torthcoming to the
City ot San B.rnardino. Thi. report i. accompanied
by our .ugg..ted language tor l.tt.r. to be s.nt to
the taxpayer. dir.ctly trom the C:ity urging
cooperation in promptly correcting the distribution
error.
c
Mr. warren A. Knuason
City of San Bernardino<:)
February 17, 1987
paqe 4
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o Receive and process reqistration control record
information monthly.
o Receive and process sale. tax 4istribution
report. quarterly.
o Coordinate with the taxpayer and state Board of
Equalization to make the necessary corrections
and collect backquarters amounts.
o Monitor and analyze the quarterly distribution
reports with audit focus on the followinq:
Those accounts with previously reported
point-of-sale di.tribution errors to
ensure that the corrections are made for
current quarter. and all eliqible
backquarter..
Those major accounts comprisinq most of
the City's total .ale. tax revenue to
identify any irregularities (e.q.,
neqative funds transfer., siqnificant
decrea.e., etc.) and ensure that the City
is not qettinq less than it is entitled.
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city of San B.rnardino 0
February 17r 1987, ,
paqe 5
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4. OPTIONAL SERVICES
Much of the data d.v.loped a. part of our audit s.rvice
is common to that required to perpetually monitor,
analyze and for.ca.t incom. from the .ale. tax resource
and provide corollary con.ultinq ..rvice. de.iqned to
maintain and enhance the City'S r.venue ba... These
s.rvic.. are offer.d a. option. to each of MRC '. audit
cli.nt..
The scope of our STARS R.ports and Corollary Consul tinq
s.rvices includ.s, but i. not limit.d to, the followinq:
4 . 1 STARS R.tlorts
o Refin. our computerized sale. tax data for the City
utilizinq MRC'. Sale. Tax Analy.is and Reportinq
Sy.t8111 (STARS).
o pr.par. and .ubmit STARS reports on a quarterly
ba.is principally focueinq on the major sales tax
producers. Major .al.s tax producer. are defined as
tho.e bu. in..... meetinq or exceedinq a .pecifi.d
quart.rly revenue thr.shold and comprisinq in
aqqr.qate 90t or more of the .al.s tax revenue
q.n.rat.d from bu. in..... locat.d in the city.
All major sales tax producer. and.
cat.qorie. are monitored and analyzed
bas.d on report. to includ. the followinq:
business
quarterly
Ma;or land Ton 100\ Sal.. Tax Producer.. Ranks
in de.c.ndinq ord.r accordinq to level of sales
tax produc.d.
Busin.ss Cla.sification. Groups and ranks
major produc.r. by bu.in.ss classification
accordinq to lev.l of sal.s tax produced.
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1'lr. WelL'r..n ". N1U,U.UU
city of San Bernardino 0
February 17, 1987
paqe 6
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Sale. Tax Trend Renorts. Indicate. qrowth and
decline comparisons by various cateqorie. for
forecastinq and analysis.
Pro1ections. For budqetary purpose., provides
sale. tax projection. ba.ed on optimisticr
pes.imi.tic and most likely economic conditions
for major business cateqorie..
Executive Sn1ll1lllJ.rv. Based on our analysis and
evaluation of the STARS reports and other datar
our quarterly report is to include an Executive
SUllllllary, which pre.ents our findinqs i
conclu.ions and recommendations in a conden.ed
format with narrative complemented by qraphic..
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City of San B.rnardinoo
February 17, 1987
paqe 7
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4.2 CorollarY Consultina
o Make specific r.commendations (for City staff and/or
MRC) to furth.r enhance the city's rev.nue bas. in
areas .uch a. .ale. taxr property tax, bu.in...
lic.nse tax, tran.ient occupancy tax, utility tax
and d.fin.d economic developm.nt qoals.
o Provide city employee. with po.t-audit .ale. tax
orientation:
Conduct t.chnical .eminar on California'. local
sale. tax distribution proc....
Train staff in the fundUlental. of .al.s tax
aUditinq .hould the City d..ir. to as.ume
r.sponsibility for future maintenance of local
r.tail account. int.rnally.
o Analyz. li.t of City's major sal.. tax producer. in
order to assi.t the City in developinq a public
r.lations proqrUl to prev.nt the 10.. of these
important bu.in......
o Profile for Economic Development/community
Redev.lopm.nt and Chamber of Commerce per.onnel the
mo.t .conomically de.irable/unde.irable type. of
dev.lopment./bu.ine.. u.er. and the rea.on. why.
o Provide a li.t of bus in..... locat.d in the city
that are not pre..ntly producinq .al.. tax to the
City of San Bernardino, but could be throuqh
constructive chanq.. in mark.tinq proc.dures.
o If economic. warrantr r.comm.nd a proqram b.
impl.m.nt.d to captur. the it sal.. tax on City
purchase. from vendors r.portinq as u.. tax and/or
havinq non-city point. of .al.s.
o A.sist in defininq sp.cific q.oqraphic area. for
which the City would have an int.re.t in knowinq the
sal.. tax produced (..q., within Community
R.d.v.lopment Aqency boundari..).
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City of San Bernardin~
February 17, 1987 ~
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5. TIMING
We are prepared to commence
immediately upon receipt of
authorization and re.olution
authorized City contractor to
records (see Exhibit B).
the proposed service
City Council contract
de.iqnatinq MRC as the
examine sales and use tax
The initial audit report identifynq point-of-sale
distribution errors is normally provided within 60
workinq days followinq receipt of authorization. The
onqoinq audit reports are provided within 30 workinq days
followinq receipt of the quarterly distribution reports.
with reqard to the optional services, STARS reports are
provided on a quarterly basis within 30 workinq days
followinq receipt of the quarterly distribution reports.
The corollary consultinq .ervice. are provided on an
onqoinq basis in conjunction with the delivery of our
onqoinq audit and STARS reports.
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city o!~San Bernardinoo
February 17, 1987
paqe 9
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6. OUALIPICATIONS
MUnicipal Re.ource Con.ultants (MRC) specialize. in
providinq sale., u.e, excise and property tax con.ultinq
service. to California municipalitie.. Each .ervice
provided i. de.iqned to produce an econOlllic return that
i. many time. qreater than the amount invested for the
.ervice.
MRC has established a reputation a. the undisputed leader
in providinq .ale. tax .ervices to California
municipalitie., ba.ed on a proven track record of
consistently impressive re.ults.
Since 1978, MRC has conducted sales tax audits that have
produced in aqqreqate more than $7 million annually in
recovered sale. tax for California municipalitie.. Our
sale. tax audits have also resulted in the identification
and correction of the larqe.t mi.allocated account. in
California.
California client. served represent a wide and varied mix
of cities with population. ranqinq frOlll le.. than 50,000
to more than 500,000, and annual .ale. tax incOllle from
less than $2 million to more than $20 million.
The uniqueness of our service and siqnificant re.ults
achieved are directly attributable to our employinq
proprietary techniques borne out of the principals'
combined 23 year. of .ales tax audit experience.
MRC's proposed service is to be provided by its
principal., John Austin and Allen Charkow.
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o Mr. Warren A. Knudson 0
City ot San Bernardino
February 17, 1987
paqe 10
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7. PERIOD COVERED & CHARGES
OUr compensation is based' on a continqency incentive tor
the initial and onqoinq sales tax audit service plus a
flat charqe tor the STARS reports and corollary
consultinq, turther described as tollows:
Sal.. Tax Audit Service
MRC's compensation tor the initial and onqoinq sales tax
audit service is entirely predicated and continqent upon
our ability to produce new sales tax income tor the City.
OUr tee tor providinq the audit .ervice, exclusive ot the
optional service., is 35' ot new sale. tax income
realized by the City as a result ot MRC identityinq and
correctinq the related point-ot-sale distribution error.
Said 35' applies to each correction tor any backquarters
tund transter. and the tirst six consecutive reporting
quarters tollowinq completion ot the audit by MRC and
contirmation ot corrections by the State Board ot
Equalization.
Should the City al.o de. ire the optional services, the
continqency incentive tee tor the audit service is
reduced trom 35' to 25'.
Sale. tax audit invoices are submitted quarterly atter
the City has received the revenue trom the correction and
quarterly distribution report contirminq it. Each
invoice is to include the business name, permit number,
local allocation amount received by the City and amount
due MRC.
STARS ReDort. & Corollarv Consultina (ODtionall
MRC is to provide STARS Reports and Corollary consulting
tor a tlat tee ot $9,000 tor the tirst yearr payable in
tour equal quarterly installments ot $2 r 250 each.
Invoices are to be submitted together with our quarterly
reports and are due and payable upon receipt.
Exnenses
It should be emphasized that under both the tlat tee and
continqency tee arranqements, all expenses are absorbed
by MRC. These expenses include items such as airtarer
auto rentals, mealsr lodqinqr keypunchinq, computer
processinq, clerical, communications (e.q'r personal
meetinqs, telephone, mail, etc.) photocopyinq, overhead
and miscellaneous out-ot-pockets tor consumable supplies
and research materials such as maps, directories, etc.
.
Q
Mr. Warren A. KnUdsonO
City of San Bernardino
February 17, 1987
paqe 11
o
o
8. CERTIFICATION OF CONFIDENTIALITY
Section 7056 of the State ot Calitornia Revenue and
Taxation code specifically limits the disclosure ot
contidential taxpayer intormation contained in the
records of the State Board ot 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 as Exhibit B).
The fo11owinq conditions specified in Section 7056 (b) r
(1) ot the State ot Calitornia Revenue and Taxation Code
are hereby made part ot this contractual aqreement
entered into between the City ot San Bernardino and
MUnicipal Re.ource Consultants (Contractor).
A. Contractor is authorized by this aqreement to examine
sales and use tax records of the Board of Equalization
provided to City pursuant to contract under the Bradley-
Burns Unitorm Sales and Use Tax Law.
B. Contractor is required to disclose information
contained in, of derived trom, those sales and use tax
records only to an officer or employee of the City who is
authorized by resolution to examine the intormation.
C. Contractor
services tor
aqreament.
D. Contractor is prohibited trom retaininq the
intormation contained in, or derivedtromr those sales
and use tax records, atter this aqreement has expired.
is prohibited frOlll performinq consul tinq
a retailer durinq the term of this
Information obtained by examination ot Board records
shall be used only tor purposes related to collection of
local sales and use tax or for other qovernmental
functions of the city as set forth by resolution adopted
pursuant to Section 7056 (b) ot the Revenue and Taxation
Code.
The resolution shall desiqnate the Contractor as a person
authorized to examine sale. and use tax records and
certity that this aqreement meets the requirements set
forth above and in Section 7056 (b), (1) ot the Revenue
and Taxation Code.
Contractor hereby certifies that any and all information
utilized in the conduct of work pertormed is to be
utilized only for those purposes authorized by the city
and by the Bradley-Burns Unitorm Local Sales and Use Tax
Law. '
(i 0
Mr. Warren A. Knudson
city of'San B.rnardino
February 17, 1987
paqe 12
o
o
9. CONCLUSION
Th. propo..d audit ..rvic. is d.siqn.d to id.ntify and
corr.ct point-of-.al. di.tribution .rror. and th.reby
q.n.rat. n.w .al.. tax incom. for the city of San
B.rnardino on an onqoinq ba.i..
Th. STARS report. and corollary con.ultinq provide the
....ntial information to monitor, analyze and foreca.t
incOlll. from the .al.. tax re.ourc. and to maintain and
enhance the city'. rev.nu. base.
Th. propo.ed ..rvic. i. automatically co.t-ju.tified
b.caus. comp.n.ation earned by MRC is d.rived from new
incOlll. which would not oth.rwis. have been realiz.d by
the city.
Should you have any qu..tion. reqardinq the propo.ed
s.rvic.. or our charqes, we are prepared to respond
promptly.
Should the City decide to u.. this propo.al as the
contract or contract attachmentr pl.a.e indicate
acceptance by notinq the service. desired and returninq
an executed copy to my attention. The oriqinal is for
your record..
xu
H2
Sales Tax Audit Service
x
STARS Report.
&
Corollary Consultinq
x
ACCEPTED FOR
CITY OF SAN BERNARDINO
ACCEPTED FOR MUNICIPAL
RESOURCE CONSULTANTS
By:
By:
Title:
Tit
Date:
Date: Februarv 17. 1987