HomeMy WebLinkAbout09 REV ENHANCEMENT 12-02-96NO. 9
12-2-96
DATE:
November 26, 1996
inter-Com
TO:
FROM'
SUBJECT:
William A. Huston, City Manager
Ronald A. Nault, Finance Director
AMEND 8COPE OF REVENUE ENHANCEMENT AND INFORMATION
SERVICES - MUNICIPAL RESOURCE CONSULTANTS
RECOMMENDATION=
Authorize the Finance Director to sign an agreement with Municipal
Resource Consultants to amend the scope of revenue enhancement and
information services subject to final approval of agreement
language by the City Attorney.
FISCAL IMPACT:
Potential increase in revenue from audit of additional sources,
fees to be contingent on actual recovery of mis-allocated revenue.
DISCUSSION:
Municipal Resource Consultants (MRC) has provided sales tax audit
services to the City of Tustin for over ten years. They were one
of the first firms to develop the programs to audit sales tax and
they have been quite successful over the years identifying and
recovering mis-allocated sales tax dollars. They have always
operated on a contingency basis for compensation, they get paid
only after the City gets paid. Last year the Community Development
Department selected MRC to install a new business license system
and provide a basic level of business liCense audit work.
Over the years, MRC has developed several enhanced revenue auditing
and tracking programs which utilize various proprietary databases
that target revenue slippage between reporting entities, and they
are proposing to provide these enhanced services to the City in
conjunction with their current services.
The following describes the enhanced services proposed by MRC:
Business License Information Service (BLIS) is comprised of a
business inventory management service. BLIS establishes and
maintains a current, comprehensive and valid inventory of all the
City's businesses. BLIS includes: MRC's .proprietary software;
physical canvassing of every street and commercial/industrial
facility within the City's borders; continuous development of the
business inventory using MRC's geobased data integration
technology; and ongoing software/data maintenance, training and
support. Each month MRC will update the City's business inventory
database and provide the Franchise Tax Board (FTB) with corrected,
standardized, enhanced and properly formatted (according to FTB
requirements) business license tax information. MRC's Business
License Information Service is eligible for State reimbursement.
Revenue Enhancement Audit Program (REAP) is designed to assist the
City in realizing all of the revenue to which it is entitled, but
may not be receiving, from the following sources: documentary
transfer tax, franchise fees, property tax (including RDA tax
increment) and transient occupancy tax. MRC's REAP service results
in the detection, documentation and correction of errors and
omissions, thereby producing new revenue that would not otherwise
have been realized by the City.
Geobased Revenue Information Program (GRIP) includes a computerized
database of all the City's land parcels, major buildings and users
(commercial, industrial, institutional, governmental, residential),
and major sources of general revenue including, but not limited to,
business license tax, franchise fees, property tax, sales/use tax,
state subventions, transient occupancy tax and utility users tax.
Quarterly, MRC shall update the GRIP database, train authorized
staff in the use of the GRIP Query System, and review with
designated City personnel the GRIP Digest with regard to revenue
performance, trends, gains, declines, projections, issues and
opportunities, and provide the City with hardcopy analysis of the
City's revenue generators and sources.
MRC is offering these enhanced services to the City on a cost
recovery basis and what they term'~everaged efficiencies'~ They are
proposing to provide the full package of enhanced services
contingent on the City recovering the cost of the Business License
Information System service from the State through SB-90 claims, and
efficiency credits for the installation of all their systems. If
the City is not able to recover its cost from the State, MRC will
not charge the City for the business license program but we would
still benefit from the efficiency credits. An example of the costs
is included in the 'Executive Summary . attached. MRC has
successfully assisted their clients~in preparing SB-90 claims and
they are confident that they can effect full reimbursement for the
City.
The Audit Committee has extensively reviewed the attached proposal
at a prior meeting and felt the benefits to the City were such that
they unanimously recommended Staff submit the proposal to the City
Council for approval. The Community Development Department is also
interested in receiving the enhanced business license services,
from both a revenue and enforcement perspective. The city-wide
canvassing of every street and commercial/industrial facility has
the potential to significantly increase business license compliance
at no cost to the City.
In summary, the authorization to enter into the proposed agreement
to amend the scope of revenue enhancement and information services
should increase the number of business licenses issued by the City,
provide additional information to our sales tax auditors to assist
them in recovering mis-allocated sales tax dollars, increase audit
work to include property taxes and real property transfer tax, and
will provide a comprehensive parcel driven revenue information
program, all of which we will pay for from'State reimbursements.
If the proposed enhancements do not perform as described or if the
City cannot recover our costs as described in the proposal, the
city may terminate one or more of the programs at our discretion.
Staff recommends the approval of the proposed enhanced scope of
services as presented by Municipal Resource Consultants.
Ronald A. Nault~'
Finance Director
RAN: ts
RA#5: Amend 1. #ov
RECEIVED
i,iu:i 2 2 ':-,,-~ ....
,FiaNCE DEPT.
PROPOSAL/AGREEMENT TO
AMEND SCOPE OF REVENUE
ENHANCEMENT & INFORMATION SERVICES
FOR
CITY OF TUSTIN
November 20, 1996
by
Municipal Resource Consultants
MuNI RESOURCE CONSULTAN'
A partnership of John T. ,4ustin, Inc. & Allen W. Charkow, Inc.
Tustin Madera San Ramon Sacramento
(714) 258-3000 (209) 432-6039 (510) 838-1115 (916) 971-4732
32107 W. Lindero Canyon Road
Suite 233
Westlake Village, CA 91361
(818) 991-5220
Fax: (818) 991-5365
November 20, 1996
Mr. Ronald A. Nault
Finance Director/City Treasurer
City of Tustin
300 Centenn/al Way
Tustin, CA 92680
Re: Revenue Enhancement\ Information Scope Amendment
Dear Ron:
As we discussed last week, I am sending you a proposal which includes all the services
which MRC can provide the Ci.ty of Tustin. Because this proposal contemplates a
comprehensive scope of services, including a property tax audit, and a Business Inventory
Management Service, it enables us to guarantee the funding of the Business Inventory
Management Service by the State through SB90 reimbursement, and it enables us to
provide the City with Audit Efficiency Credits which the City can use to reduce our fees for
the other services.
The proposal contains the following:
Gl Executive Summary
Gl Amended Consultant Services Agreement
Gl Brochure describing MRC's Business License Services
Brochure describing MRC's Progressive Revenue Services
If you have any questions, please call me at (714) 366-2438.
Sincerely,
MLS:kg
Enclosures
EXECUTIVE SUMMARY
Municipal Resource Consultants (MRC) agrees to amend the scope of revenue enhancement
and information services presently provided to the City of Tustin (City) to include
additional sources of revenue. MRC's amended services are to be provided on an entirely
self-funded basis without creating an expenditure impact on the City's budget. '
SALES TAX AUDIT & INFORMATION SERVICES
Since 1985, MRC has provided the City with sales tax audit and information
services. As of the second quarter of 1996, MRC's sales tax audit service produced
$7,425,322 of net new revenue for the City, for a return on the City's investment of
1311%.
In conjunction with the audits, each quarter MRC provides the City with a Sales Tax
Analysis and Reporting Service (STARS) which consists of a ~uarterly updated
onsite Query System and bound Digests. The STARS Query System includes
confidential data on all the City's sales tax generators. The STARS Digests reflect
MRC's monitoring and analysis of the City's sales tax revenue and generators, to
identify revenue performance, trends, gains, declines, projections, issues and
opportunities.
PROGRESSIVE REVENUE SERVICES
Business License Information Service (BLIS) is comprised of a business
inventory management service . BLIS establishes and maintains a current,
comprehensive and valid inventory of all the City's businesses. BLIS includes:
MRC's proprietary software; physical canvassing of every street and
commercial/industrial facility within the City's borders; continuous
development of the business inventory using MRC's geobased data integration
technology; ongoing software/data maintenance, training and support as
described in Exhibit "A." MRC shall install the software on a City computer and
train staff within 60 working days .of receipt of the amended agreement
approved by the City. Each month MRC shall update the City's business
inventory database and provide the Franchise Tax Board (FTB) with corrected,
standardized, enhanced and properly formatted (according to FTB
requirements) business license tax information. MRC's Business License
Information Service is eligible for State reimbursement.
Revenue Enhancement Audit Program (REAP) is designed to assist the City in
realizing all of the revenue to which it is entitled, but may not be receiving, from
the following sources - documentary transfer .tax, franchise fees, property tax
(including RDA tax increment) and transient occupancy tax - as described in
Exhibit "B." MRC's REAP service results in the detection, documentation and
correction of errors and omissions causing deficiencies and thereby produces
new revenue that would not otherwise have been realized by the City. MRC
shall commence the REAP service within 10 working days following receipt of
the amended agreement.
Geobased Revenue Information Program (GRIP) includes a computerized
database of all the City's land parcels, major buildings and users (commercial,
industrial, institutional, governmental, residential), and major sources of general
revenue including, but not limited to, business license tax, franchise fees,
property tax, sales/use tax, state subventions, transient occupancy tax and utility
users tax, as described in Exhibit "C." Quarterly, MRC shah update the GRIP
database, train authorized staff in the use of the GRIP Query System, and review
with designated City personnel the GRIP Digest with regard to revenue
performance, trends, gains, declines, projections, issues and opportunities and
provide the City with hardcopy analysis of the Ci ,ty's revenue generators and
sources.
LEVERAGED EFFICIENCIES
IvLRC has developed a unique package of revenue audit and information services
that progressively build on each other to capitalize on the common tasks
accomplished, data developed and results produced. MRC calls this "leveraged
efficiencies."
MRC's Progressive Revenue Services capitalize on these leveraged efficiencies to
maximize client revenues, cost savings and return on investment. MRC is thus able
to provide the City with a comPrehensive package of extremely valuable, unique
services that are entirely self-funding.
SELF-FUNDING COMPENSATION
MRC has structured the BLLS, REAP and GRIP services to be ent/rely self-funding
for the City, as follows:
Business License Information Service (BLLS) - is entirely eligible for SB 90
reimbursement and MRC's compensation is not payable until the City has
received the service and the State has reimbursed the City for BLIS. In the event
the State does not fully reimburse the City for BLIS, the amount not reimbursed
by the State is not due to MRC until the City has received full reimbursement
from the State. The Business Inventory Management Service shall be provided for
an annual fee of $55,026.
Revenue Enhancement Audit Program (REAP) - shall be provided on a self-funded
basis, whereby MRC's compensation is entirely predicated and dependent upon the
results produced for the City. MRC's compensation is 25% of the deficiency
recoveries from eli~ble prior periods. When M_RC's service results in the detectio~t
and correction of errors/omissions that the City and MRC mutually agree will
produce ongoing (rather than one-time) benefits to the City, MRC's compensation is
O ·
5, To of the incremental revenue realized by the City during the first twelve quarters
fouowing correction.
Geobased Revenue Information Program (GRIP) - compensation for the initial
development and implementation of the GRIP database is $16,000. The monthly
fee for the ongoing service is $1,000. MRC's compensation for providing the
initial and ongoing GRIP service is payable after the City has received the
services being invoiced and has sufficient funds to cover the charges from
accrued Audit Efficiency Credits (see below) and/or the City's share of new
revenue produced from MRC's revenue enhancement audits.
MRC Audit Efficiency Credits - Efficiencies and savings are realized by MRC
from common tasks accomplished and data developed in providing the REAP
and GRIP services. In this regard, MRC proposes to offer to the City, in the form
of Audit Efficiency Credits, an opportunity to reduce the compensation paid
MRC by the Ci ,ty. These are detailed in Exhibit B, Section 5.1.
EXAMPLE OF SELF-FUNDING AND USE OF AUDIT EFFICIENCY CREDITS
The following illustrates a hypothetical example using new revenue generated by MRC's
audit services and state reimbursement to fund services provided during the first year of
the amended agreement
Revenue .Self-Funded
to Cost to
BLIS reimbursement to City from State
Less: business inventory management service
$55,026
<55,026>
· New revenue to City, from MRC's REAP services
(including sales/use tax audits)
Less: 1VfRC compensation at 25%
$160,000
40,000
GRIP service charge for first full year
($16,000 initial & 6 months @ $1,000)
(second year total cost- $12,000)
22.,.OOO
MRC Audit Efficiency Credits
TOTALS $160,000
<26,000>
$36,000
Ci.ty may apply Audit Efficiency Credits to MRC's audit fees and GRIP.
TABLE OF CONTENTS
AMENDED CONSULTANT SERVICES AGREEMENT
EXHIBIT A
BUSINESS LICENSE INFORMATION SERVICE
Attachment A-1 Licensing Agreement for BLIS
EXHIBIT B
REVENUE ENHANCEMENT AUDIT PROGRAM
EXHIBIT C
GEOBASED REVENUE INFORMATION PROGRAM
Attachment C-1 Licensing Agreement fOr GRIP
AMENDED CONSULTANT SERVICES AGREEMENT
THIS AGREEMENT is made at Tustin, California, as of 1996, by and
between the City of Tustin, a municipal corporation (hereafter referred to as "City")
and Municipal Resource Consultants (hereafter referred to as "Consultant" or "MRC"),
who agree as follows:
· 1. Services. Subject to the terms and conditions set forth in this Agreement,
Consultant shall provide to City the services described in Exhibits "A", "B" and "C"
·
(the "Exhibits".) Consultant shall provide said services at the time, place, and in the
manner specified in the Exhibits. Consultant shall not be compensated for services
outside the scope of the Exhibits.
2. Payment. City shall pay ConsUltant for services rendered pursuant to this
Agreement at the times and in the manner set forth in the Exhibits. The payments
specified in the Exhibits shall be the only payments to be made to Consultant for
services rendered pursuant to this Agreement, unless the City approves additional
compensation for additional service. Consultant shall submit all billings for services
rendered pursuant to this Agreement to City in the manner specified in the Exhibits.
3. Facilities and Equipment. Consultant shall, at its sole cost and expense,
furnish all facilities and equipment which may be required for furnishing services
pursuant to this Agreement, with the exception of the computer equipment specified in
the Exhibits.
4. Exhibits. All Exhibits referred to herein are attached hereto and are by this.
reference incorporated herein.
EXECUTED as of the day and year first above stated.
·
CITY OF TUSTIN
By:
Title:
Date:
MUNICIPAL RESOURCE CONSULTANTS
Date: November 20, 1996
EXHIBIT A
BUSINESS LICENSE INFORMATION SERVICE
Municipal Resource Consultants (MRC) proposes to provide to tlie Ci,ty of Tustin (City)
a Business License Information Service (BLIS) that is comprised of a business inventory
management service. The objectives, scope, procedures, system requirements, custom
specifications, software license, timing, support and compensation are set forth as
follows:
.,
BACKGROUND
In 1984 the state legislature enacted Revenue and Taxation Code Section 19556 ~
requiring most California cities to furnish the state Franchise Tax Board (Fl'B)
specific business tax information each year. In this regard, Government Code
Section 17561 2 provides for reimbursement to cities for certain costs incurred
from state-mandated local programs; also known as SB 90 reimbursement_
The FTB utilizes the cities' business communi ,ty data to monitor compliance with
the State Income Tax, and Bank and Corporation Tax. This program has proven
to be successful in allowing the FTB to increase state revenue, but it has become
apparent to the FTB that there is a strong correlation between the quality .and
frequency of the data received and the amount of the revenue that could be
raised for the State. Furthermore, research has shown that cities throughout
California experience changes in their business base at an average rate exceeding
20% per year - due to business openings, closings, expansions, consolidations,
relocation, mergers, acquisitions and other events. Given this situation, a valid
listing of a city's businesses .typically does not exist_
As a ~esult, much of the data received by the FTB is not of the desired quality,
frequently in the wrong format, missing important data (e.g. SIC codeS), not
standardized as to address and name, includes closed businesses not purged
from city files, missing many new businesses and it is received only once a year.
1 Revenue and Taxation Code Section 19556 requires any California city which maintains or has access
to a computerized recordkeeping system, and which assesses a business tax, to annually furnish the
Franchise Tax Board specified business tax information on all businesses subject to the tax in the
preceding fiscal year. The Government Code further specifies that access to the business tax
information is to be kept confidential and shall be disclosed only to the FTB.
2 Government Code Section 17561 provides for the State Controller's Office to reimburse cities for
certain cost incurred for state-mandated local programs. City-incurred costs that are eligible for such
reimbursement include administrative, operational and related costs which are reasonably necessary to
implement and maintain an FTB compliance program. This includes costs for staff, independent
consultants, automated and manual system modifications, data collection and reasonable allocation of
overhead expenses.
1
0
ge
MRC's BLIS business inventory, management service creates and maintains a
comprehensive and valid inventory of current businesses operating within the
City's boundaries. The inventory is created by combining MRC's geobased data
integration technology, which extracts relevant business data from a large
variety of data sources (including the City's existing business license records),
and physical canvassing of the City which captures those firms that elude
electronic data sources. The combined data is corrected, standardized and
enhanced '(e.g. business name, address, SIC code) and formatted according to
FTB requirements. Each month the data is updated and delivered to the FTB
and the City. The business inventory provided to the City is placed on a
personal computer designated by the Ci,ty and is accessible through MRC's
proprietary compliance software. BLIS is eligible for State reimbursement.
OBJECTIVES
MRC's BLIS is designed to assist the City achieve the following objectives:
Build and Maintain an Accurate Business Inventory
Produce State-Mandated Business Tax Information that Qualifies for State
Reimbursement
SCOPE OF SERVICE
MRC shall provide the City with a Business License Information Service which
includes:
Creation and maintenance of a comprehensive and valid inventory of the
City's businesses that is continuously updated
Monthly progress reports to the City on the status of the business
inventory which shall include the current business inventory
Production of business inventory data on appropriate .media and in
appropriate format provided to meet the mandate reporting deadline of
March 31 each year
License to use MRC's proprietary business inventory management
software
Ongoing software upgrades, training and support
Assistance with Franchise Tax Board (FTB) reporting and SB 90
reimbursement claims
4.
PROCEDURES
MRC responsibilities:
Gl
Review the City's business license tax ordinance for enforceability,
coverage, billing and collection efficiency
Gl Review the City's business license forms for opportunities to simplify
taxpayer reporting, capture economic development data (number of
employees, building space, etc.) and FTB-mandated information, and
increase processing efficiency
Gl Secure from the City on electronic media a current listing of all businesses
reg4stered with the City, and convert the data to a BLIS-readable format
Develop and maintain a computerized inventory of businesses operating
in the City by:
o Physically canvassing every street and commercial/industrial
facility within the City's borders
o Preparing an aggregated list of business entities on electronic
media; this list is derived from multiple private and public hard
copy and electronic sources, including specialized business listings
and directories, and the City's business tax and other confidential
revenue payment files
· o .Cleaning and standardizing, in address-order, each entity's
business name, address, and payment file information to eliminate
redundancies
Provide monthly data cleaning, standardization and multiple source
integration using MRC's proprietary, software for compliance and
enforcement
Install the BLIS software, provide ongoing software upgrades, training
and support
Assist City and/or the City's consultant in preparing the claim for state
reimbursement by providing the substantiating documentation and
rationale to support the SB 90 claim and represent same with the FTB and
the State Controller's Office
City staff responsibilities:
Establish a record for each registered business to include Fl'B-mandated
information;
Each month provide MRC with a current listing of all businesses
registered with the City on electronic media;
.
e
Submit to the appropriate State agency an es~mated claim for BLIS
reimbursement by. the deadline for submitting estimated claims for
compliance with State mandates each year (November 30 of the fiscal year
in which the expense is incurred, or other deadline as may be established
by the State); and
Submit to the appropriate State agency a claim for actual expenses
incurred for BLIS by the deadline for submitting claims for
reimbursement of State mandated local programs (November 30
following the fiscal year in which t. he expense is incurred, or other
deadline as may be established by the State).
SYSTEM REQUIREMENTS
The BLIS software component requires the following hardware:
o Any 486 based IBM or compatible PC with 8 MB RAM
o Hard disk with free space of at least 100MB
o 3.5" disk (1.44 MB)
o S-VGA or VGA monitor
o Parallel (Centronics compatible) printer interface
o Any Centronics-compatible parallel printer
o Modem (min. 14.4 baud rate 28.8 preferred) and
telephone line
Software required includes:
dedicated
o MS or PC DOS version 5.0 or later
o Communications software for the modem
o Word processing software with mail merge capability, i.e.,
WordPerfect, Microsoft Word, etc. for optional business license
administration service
Should the City desire, MRC will assist in evaluating and procuring the necessary,
hardware and/or software.
SOb-TWA_RE LICENSE, TIMING AND SUPPORT
BLIS includes the attached software license and maintenance agreement. (see
Attachment A-l).
Within 60 working days of contract authorization, MRC shall:
Install BLIS software on City hardware
Provide staff with up to 16 hours of training with easy-to-use operating
manuals
MRC shall also provide ongoing software and documentation upgrades, data
updates, and up to 12 hours of annual support onsite or remotely by telephone
and/or modem on an as-needed basis.
8.
COMPENSATION
Pursuant to Government Code Section 17561, MRC's fees for BLIS are ehgible for
reimbursement by the State. To make BLIS entirely self-ftmding for the City,
MRC's compensation is payable only after MRC has installed the BLIS software
on City computer system, has trained City personnel on the use of the software,
has produced the business hcense inventory in the appropriate format and on
appropriate media and delivered same to the FTB to meet the State reporting
mandate, and the City has been paid on its estimated claim for State
reimbursement for BLIS. MRC's fee for BLIS is due within ten days thereafter.
In the event the State Controller's office should make incremental payments to
the City for its SB-90 claim, the amount due MRC from each payment shall be in
proportion to the cost of BLIS as it relates to the total amount of the City's
business license mandate claim. If the State does not fully reimburse the City for
BLIS, the amount not reimbursed is not due MRC until the State has reimbursed
it to the City.
The annual Business Inventory. Management Service is provided for a fee of
$55,026.
MRC shall assist the City and/or the City's consultant in preparing the necessary
claim for state reimbursement by providing the substantiating documentation,
rationale, .and cost breakdown to support the SB 90 claim and represent same
with the FTB and the State Controller's Office.
AUTHORIZATION
The City of Tustin hereby authorizes MRC to provide the following BLIS service:
Business Inventory. Management Service
EXECUTED as of this day
CITY OF TUSTIN
BY:
Title:
Date:
MUNICIPAL RESOURCE CONSULTANTS
PART~: ~HN~T_~.~C-
~tle: / PDaT~' i~Sviedi~ter 20, 1996
Attachment A-I
LICENSING AGREEMENT
folt
BUSINESS LICENSE INFORMATION SERVICE (BLIS)
This Agreement is made at Tustin, California, as of 1996, by and between
the City of Tustin, a municipal corporation (hereafter referred to as "City") and
Municipal Resource Consultants (hereafter referred to as "MRC"), who agree as
follows:
o
License. Subject to the terms and conditions set forth in this Agreement, MRC
shall provide to the City a license to use MRC's software, database, and other
property (hereafter referred to as "Property',') as further described in
Exhibit "A". MRC shall provide said Property at the time, place, and in the
manner specified in Exhibit "A". MRC shall not be compensated for property
outside the scope of Exhibit "A".
.
Restrictions. Said Proper .fy shall only be used by the City. The City shall not
sublet, duplicate, or modify, said Property,. Said Property may only be used for
the purposes described in Exhibit "A"~ Said Property shall be returned to MRC
at the time the license expires. MRC may terminate the license, at its sole option,
if City violates any of the stated restrictions. The Property remains the sole and
exclusive property of MRC.
The license granted hereunder shall not imply ownership by City 'of said
Property, rights of City to sell said Property, or rights to use said Property for
the benefits of others. This hcense is transferable only with MRC's written
consent.
o
Payment City shall pay MRC for hcense rendered pursuant to this Agreement
at the times and in the manner set forth in Exhibit "A". The payments specified
in Exhibit "A" shall be the only payments to be made to MRC for license
rendered pursuant to this agreement, unless the City approves additional
compensation for additional property. MRC shall submit all billings for license
rendered pursuant to this Agreement to City in the manner specified in
Exhibit "A".
o
e
Bi
o
Attachments and Exhibits. All Attachments and Exhibits referred to herein are
appended hereto and are by this reference incorporated herein.
Proprietary Information. As used herein, the term "proprietary information"
means any information which relates to internal contrOls, computer, or data
processing programs; data that has been modified by MRC proprietary
techniques resulting in standardized, specifically correlated, or integrated
information; electronic data processing applications, routLnes, subroutines,
techniques, or systems; or business affairs and methods of operation or
proposed methods of operation of MRC, except such information which is not
obtained through this Agreement or which is in the public domain at the time of
its disclosure to the other party. City shah hold in confidence using levels of
effort consistent with its own policies applicable to its confidential information
and shall not disclose to any other party any MRC proprietary information (as
such term is herein defined) which may be disclosed to City by MRC in
connection with this Agreement or otherwise learned or obtained by City in
connection with this Agreement. The parties further agree not to take any other
action inconsistent with the confidential nature of MRC prop'rietary i/fformation.
The obligations imposed by this Paragraph shall survive any expiration or
termination of this Agreement
Waiver. No waiver of any breach or failure or delay in exercising any fight,
power, or remedy shall constitute a waiver of same or of any provision hereof
and no waiver shall be effective unless in writing and signed by an authorized
representative of the par .ty against whom enforcement of such waiver is sought
Severabilitv. The provisions of this Agreement are severable, and the
unenforceabili.ty of any provision of this Agreement shall not affect the
enforceability, of this Agreement or any other provision hereof. In addition, in
the event that any provision of this Agreement is determined by a court to be
unenforceable as drafted, the parties acknowledge that it is thbir intention ~at
such provision be construed in a manner designed to effectuate the purposes of
such provision to the fullest extent enforceable under applicable law.
'Taxes. City shall be responsible for the payment of any applicable taxes in
connection with the Agreement, except for any tax based on MRC's net income.
Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California. Any controversy or claim
arising out of or relating to this Agreement, or the breach thereof, shall be settled
by arbi.tration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award rendered by
the Arbitrator(s) may be entered in any court having jurisdiction hereof.
10.
Remedies Cumulative. All remedies in this Agreement are cumulative and in
addition to and not in lieu of, any other remedies a party may have at law or in
equity.
11.
Entire Agreement_ This Agreement and the Exhibits hereto, which is hereby
incorporated herein by reference, shall constitute the entire agreement between
City and MRC with respect to its subject matter, shall supersede all prior
agreements and understandings, if any, between the parties respecting the
subject matter hereof and may be modified only by written agreement of the
parties.
EXECUTED as of the day and year first above stated.
CITY OF TUSTIN
By:
Title:
Date:
MUNICIPAL RESOURCE CONSULTANTS
PARTNER: JOHN T. AUSTIN, INC.
Title.~Prel~si~~nAtustin
Date:
November 20, 1996
REVENUE ENHANCEMENT AUDIT PROGRAM
EXHIBIT B
Municipal Resource Consultants (MRC) presently provides to the City of Tustin (City) a
Revenue Enhancement Audit Program (REAP) to assist the City in realizing all of the
revenue to which it is entitled from documentary transfer tax, franchise fees, property
tax, and transient occupancy tax. The purpose, scope, procedures, timing, reports and
compensation are set forth as follows:
1. BACKGROUND
Many California cities are not realizing all of the revenue to which they are
entitled from existing tax sources due to administrative errors and omissions by
businesses and third-party intermediaries (such as the state, counties, and utility
companies) responsible for collecting the revenue and remitting it to.the cities.
Administrative errors and omissions are inevitable given the non-standard,
complex nature of state and local taxes with regard to applicability, rates,
exceptions, exemptions, quirks and inconsistencies. Rapidly changing
technology, deregulation, human fallibility, fragmented responsibilities and
employee turnover further compound the problem.
Because there are time limitations on a government agency's ability to recover
revenue to which it has been deprived, it behooves the City to have revenue
enhancement audits conducted as thoroughly and rapidly as possible.
,,
PURPOSE & SCOPE
The purpose of MRC's revenue enhancement audits is to assist the City in
recovering all of the revenue to which it is entitled from the following sources:
Documentary Transfer Tax
Franchise Fees
Property, Tax (including RDA tax increment)
Transient Occupancy Tax
MRC's Revenue Enhancement Audit 'Program results in the detection,
documentation and correction of errors and omissions causing deficiencies and
thereby produces new revenue that would not otherwise have been realized by
the City.
3. PROCEDURES
In providing the revenue enhancement audit service, MRC shall:
Meet with Ci.ty's designated staff to review service objectives, scope,
workplan schedule, public relations and logistical matters; MRC will also
establish an appropriate liaison with the City's coordinator and logical
checkpOints for reviewing progress
Note: With the exception of this initial mee. ting, MRC's revenue
enhancement audit service requires mirdmal time and effort on the part of
City staff
Review applicable provisions of the City's municipal code and ordinances
adopted by the City
Represent the Ci.ty for purposes of examining records pertaining to the
revenue sources listed above (see Section 2) to identify and confirm any
errors/omissions that are resulthng in deficient payment to the City
For each error/omission identified and confirmed, prepare
documentation to substantiate and facilitate recovery of revenue due from
prior periods (plus applicable interest and penalties)
Prepare and forward to the appropriate parties "date of knowledge"
requests for corrective action and revenue recovery
Meet with designated City official(s) as necessary to review our findings
and recommendations
Provide additional assistance as necessary to support the City in
recovering and preventing tax deficiencies
MRC's detailed procedures for auditing each revenue source shall be provided
on request.
4.
TIMING & REPORTS
MRC shall commence the revenue enhancement audits within 10 working days
of authorization with the objective of delivering the initial audit reports within
90 to 120 working days after receiving the necessary data. Thereafter, MRC shall
· provide the City with audit progress reports to include, but not be limited to, the
following:
Status of work in progress, including copies of reports provided to
taxpayers/intermediaries addressing each reporting error/omission
individually, including where applicable the business name, 'address,
telephone number, account identification number, individuals contacted,
date(s) of contact, nature of business, reason(s) for error/omission and
recommended corrective procedure
Actual revenue produced for the City by MRC's serv. ice on a quarterly
and cumulatiVe basis
Projected revenue forthcoming to the City as a result of MRC's audit
service, specified according to source, timing and one-time versus
ongoing
Alphabetical listing of all errors/omissions detected for the City by MRC
including, for each, the account number, correction status, payment
amount received by the City, period to which payment is related and
payment type (e.g., reallocation, deficiency assessment, etc.)
5.
COMPENSATION & EXPENSES
To make MRC's service self-funding for the City and its Redevelopment Agency
(Agency), MRC's compensation for providing the Revenue Enhancement Audit
Program (REAP) shall be entirely predicated and contingent Upon the audit(s)
producing new revenue that would not otherwise have been realized by the
City/Agency.
Under this arrangement, the City/Agency agree(s) to pay MRC an amount equal
to 25% of the deficiency recoveries from eligible prior periods (plus associated
charges for penalties and interest). Said recoveries include amounts recovered,
refunded, credited, or any other consideration received by the City/Agency in
lieu or as a result of the audit findings. When MRC's audits result in the
detection and correction of errors/omissions that the City/Agency and MRC
mutually .agree will produce ongoing (rather than one-time) benefits, MRC's
compensation shall be 25% of the incremental revenue realized by the
City/Agency during the first twelve consecutive quarters following correction.
In this regard, the City/Agency agree(s) to:
o Invoice the responsible party for tax deficiencies (plus associated charges
for penalties and interest) identified and confirmed by MRC within 30
days following receipt of MRC's report; and
Notify MRC within 10 days following receipt by the City/Agency of
payments (cash payments, installment payments, or other compensation
directly benefiting the City/Agency) resulting from MRC's audit service.
Upon being notified of receipt of payment(s), MRC will then invoice the
City/Agency. Earned compensation is due and payable upon receipt of
invoices.
All expenses incurred by MRC in providing the revenue enhancement audits
and information services are absorbed by MRC. These expenses include items
such as employee salaries and benefits, insurance, airfare, auto rentals, meals,
lodging, keypunching, computer processing, clerical meetings, telephone, ma/l,
etc.) photocopying, overhead and miscellaneous out-of-pockets for consumable
supplies and research materials such as maps, directories, etc.
5.1
MRC AUDIT EFFICIENCY CREDITS
Efficiencies are realized by MRC from common tasks accomplished and data
developed in providing multiple revenue audit services and GRIP. In this
regard, MRC proposes to offer to the City, in the form of Audit Efficiency
Credits, an Opportunity to reduce the compensation paid MRC as follows:
First Tier Audit Efficiency Credits - the City can qualify for First Tier
Audit Efficiency Credits fi, in addition to BLIS, the City elects to utilize
MRC's REAP and GRIP services. This will provide a credit of $26,000,
which may be used to reduce MRC earned compensation from REAP
and/or GRIP services for the period described below each year
commencing July 1, 1996.
Second Tier Efficiency Credits - the City can qualify for Second Tier
Audit Efficiency Credits if, in addition to BLIS, the City elects to utilize
MRC's REAP service (but not GRIP). This will provide a credit of $13,000,
which may be used to reduce MRC earned compensation from the REAP
service for the period described below each year commencing July 1,
1996.
In addition, to qualify for Audit Efficiency Credits, the City must:
~1 Authorize MRC to proceed with the appropriate services for the Tier of Audit
Efficiency Credits sought;
~1 Submit to the appropriate State agency an estimated claim for BLIS
reimbursement by the deadline for submitting estimated claims for
compliance with State mandates each year (November 30 of the fiscal year in
which the expense is incurred, or other deadline as may be established by the
State); and
~ Submit to the appropriate State agency a claim for actual expenses incurred
for BLIS by the deadline for submitting claims for reimbursement of State
mandated local programs (November 30 following the fiscal year in which
the expense is incurred, or other deadline as may be established by the State).
Audit Efficiency Credits are granted July I of each year and are applied to MRC
billings between that July I and the following June 30 to reduce the amount due
MRC as earned compensation for providing REAP and/or GRIP services. Audit
Efficiency Credits may not be carried over beyond June 30 of any year.
As stated above, MRC's revenue audit and information services are being
provided as a package. Should the City elect to terminate any of the services
provided by MRC, or should there be a fundamental change in the funding or
administration of any of the revenue sources subject to MRC services, or should
the State cease to mandate and/or fund the city business license reporting
program, the Compensation and Audit Efficiency Credits sections of the package
agreement would be subject to modification by mutual agreement of the City
and' MRC.
6. BACKSTOP AUDIT PROGRAMS
MRC's revenue enhancement and information services described in this and the
followamg exhibit are to be provided on a self-funding basis without creatfing an
expenditure impact on the City's budget.
Accordingly, if the City has an additional ("backstop") revenue enhancement
audit program (staffed by internal or external personnel), it is understood and
agreed that those personnel must detect and document in writing (on behalf of
the City) to the taxpayer and/or responsible intermediary (e.g., state, utility
company, etc.) each individual error/omission at least one full calendar quarter
prior to MRC doing so. Otherwise, MRC shah be entitled to receive
compensation for detecting and documenting any such error/omission which
has resulted in deficient payment to the City. For this purpose, the City and
MRC shah provide copies to each other of notices submitted to taxpayers and/or
intermediaries (state agencies, county, utility service providers, etc.).
EXHIBIT C
GEOBASED REVENUE INFORMATION PROGRAM
Municipal Resource Consultants (MRC) hereby agrees to provide to 'the City of Tustin
(City) a Geobased Revenue Information Program (GRIP). The purpose, scope,
procedures, timing, deliverables,' compensation and licensing agreement (attached) are
set forth as follows:
1. BACKGROUND
1.1
1.2
THE NEW REALITY: SELF-RELIANT CITIES
The 1990s ushered in a new reality for every city in California: fiscal self-
reliance. Faced with permanent cutbacks in federal and state assistance, each
city is dependent upon the revenue generated from its own economic base to
define the level of services it can afford to provide.
CITY SERVICE FUNDING EQUATION
To sort out and better understand the strategic significance and ramifications of
self-reliance for California cities, MRC has developed what we call the "City
Service Funding Equation" to express the fundamental elements of this new
reality, as follows:
Economic Base X Revenue Structure = City Service Funding Capacity
MRC's City Service Funding Equation simply says that a city's service funding
capacity is determined by- and the product of- its revenue structure applied
across its economic base.
Economic Base- Includes land, buildings and the users thereof (commercial,
industrial, institutional, residential, governmental) that are located in the City.
Revenue Structttre - Consists of:
Non-Discretionary Taxes - Those revenue sources that a city does not
have the authority to directly control, such as:
o Property Tax
o Sales/Use Tax
o State Subventions
Gl Discretionary Taxes - Those revenue sources that a city does have the
authority to directly control, such as:
o Business License Tax
o Transient Occupancy Tax
o Franchise Fees
o Utility Users Tax
1.3 THE ONLY CONSTANT: CHANGE
e
Given this new reality, each city needs to have a better understanding of its
economic base and revenue structure. This is a formidable, challenge in that the
economic base and revenue structure are dynamic - not static - due to:
[] Changing Business Base - Cities experience changes in their business
base at an average rate exceeding 20% per year - due to business
openings, closings, expansions, consolidations, relocations, mergers,
acquisitions and other events.
[] Changing and Outmoded Revenue Structure - Application of a city's
revenue structure to its economic base is constantly subject to change from
legal decisions, legislation, regulation, deregulation and emerging
technology, especially in the area of telecommunications.
PURPOSE & APPLICATIONS
MRC shall develop and maintain a database to monitor and analyze revenue
generated from the City's economic base and revenue structure and input the
data elements into GRIP- MRC's Geobased Revenue Information Program.
GRIP facilitates the reorganization, monitoring and analysis of revenue
contribution on a total amount, segregated and aggregated basis according to
revenue source, business type, industry, business, land use, facility,
development and designated geographic area.
GRIP is a leading edge analytical and management tool which will enable MRC
to assist Tustin develop and implement strategies to preserve and enhance the
City's revenue base (and therefore service funding capacity) through
applications such as:
[] Economic Development
o Business Retention
o Business Attraction
o Business Expansion
o Business Cooperation
[] Land Use Planning
[] Revenue Productivity Analysis'
[] Budgeting & Revenue Projections
Gl Business License Strategic Analysis
Gl Fiscal & Economic Impact Analysis*
Gl Benefit Assessment Districts
· MRC recommends that elements of physical presence (e.g., number of employees, land area/building
space, etc.) be included in the GRIP database to maximize the value of these applications to the City.
2
3. SCOPE
Sections 3, 4, 5 and 6 describe the scope, procedures, timing and deliverables for
the Core GRIP Services. Optional GRJ2v Services are described under Section 7.
GRIP provides the City with standardized, integrated and quarterly-updated
data on all key revenue sources and revenue generators in one database.
Specifically, the GRIP database shall encompass:
The land parcels, major buildings, and users (commercial, industrial,
institutional, governmental, residential) located within the City's
boundaries; and
The City's major sources of general fund revenue including, but not
limited to, the following:
o Business License Tax
o Franchise Fees
o ProperS' Tax
o Sales/Use Tax
o State Subventions
o Transient Occupancy Tax
MRC defines a revenue generator as any entity that has a physical presence
within the City. Such an entity may either occupy or own a parcel within the
City, or be conducting business that generates revenue to the City. The GRIP
database has at least one record for each revenue generator.
As an option, the GRIP database can be expanded to include physical presence
information (number of employees, land/building size) for the City's Core
RevenUe Generators. A Core Revenue Generator is defined as being one of the
City's most significant entities in terms of revenue generation. A city typically
has up to 150 Core Revenue Generators.
GRIP is a relational database, designed for extraction of information by
structuring appropriate queries. Imbedded in the database is geographic
locational information that allow queries to be address-specific, address range-
specific or parcel-specific. Should the City already possess an operational GLS
system, GRIP will be customized to link with the existing system's parcel index.
MRC's multi-disciplined staff also designs digitized mapping systems for cities.
(See Section 7.0 Optional Services - Electronic Mapping.)
4. PROCEDURES
In providing the Core GRIP Services, MRC shall:
Meet with City's designated staff to 'review service objectives, scope,
procedures, workplan schedule, public relations and logistical matters;
MRC will also establish an appropriate liaison with the City's coordinator
and define logical checkpoints for reviewing progress
Review applicable provisions of the City's municipal code and ordinances
adopted by the City .
Study City-provided data such as current year's budget, financial
statements, general plan, aerial photos, maps, special reports and studies
(economic, market, feasibility, fiscal, etc.) that provide relevant
background or insight
Inventory the land parcels and commercial, industrial, institutional,
governmental and residential (other than single family) revenue
generators located within the Ci .ty's boundaries
For each residential revenue generator, ascertain addreSs .and/or assessor
parcel number, revenue source and amount received by the City during
the most current year available (to be compiled for future yearS)
For each business, ascertain name, address, assessor parcel number,
business category, revenue source, and City's portion of revenue
generated (to be compiled for future years)
Electronically integrate all applicable revenue sources by business for
each address location by matching name to address and "sanitizing" all
data to assure its accuracy
Update the data accuracy,, completeness and integration each quarter as a
byproduct of our ongoing Revenue Enhancement Audit Program
Arrange revenue receipts on a modified accrual basis for each period
Assign each revenue generator a business category number
Maintain,. update and integrate the database for the duration of the
contract
Prepare and install initial and quarterly-updated GRIP Query System for
onsite access by authorized City staff in formats that provide for
confidential and non-confidential outputs
In conjunction with the initial installation, MRC will conduct a one-day
session to train authorized City staff in the use of the GRIP Query System
and an easy- to-follow user manual, also furnished by MRC
In conjunction with the quarterly updates, MRC will conduct a 1-to-2-
hour session to train authorized staff in the use of the GRIP Query System
and user manual
Using standard GRIP Query System menu output, format data to be
compatible with City's GIS to link through assessor parcel numbers
Prepare and personally present to the City initial and quarterly-updated
GRIP Digests, which reflect M-RC's monitoring and analysis of the City's
revenue, and revenue generators, to identify, revenue performance,
trends, gains, declines, projections, issues, opportunities and options
o
CITY SUPPORT
The City agrees to support MRC by providing or arranging to provide (to the
best of its ability) the following:
[] Letters of introduction (as required)
[] Requests for information (as required) from third parties (such as the
state, county, utili .t-y companies, etc.)
Codes/ordinances covering each tax imposed by the City
[] Current year's budget report
[] Revenue receipt information for City-imposed taxes and state subventions
plan (and proposed
that would provide
Special reports and studies such as general
amendments), economic, market, feasibility, etc.
additional backgroUnd or insight
[] Maps (and related information) that would provide additional
background or insight, such as:
Engineering and zoning maps of City. (100' or 200' per inch scale)
Zoning maps with street delineations
Copy of Assessor's book/page maps for entire City
Tax Rate Area (TRA) maps (and list of City and RDA TRAs)
RDA project boUndary maps
Most recent aerial photograph(s) of entire city
Computer equipment and related software
Hardware
o 486/33, 486/50 or 486/66 PC System
o 17" SVGA monitor
o VESA LB video SVGA(not an ORCHID, preferably GENOA)
o 16 MEG RAM
o 500 MEG internal IDE drive
o 4X CD ROM drive
o Mouse (serial port)
o Mouse pad
o Modem (min. 14.4 baud rate 28.8 preferred) and dedicated
telephone line
o HP compatible Printer (e.g. Brother H-L630-645, Epson Actionlaser,
HP 2 series) with 2 MEGs of memory
o Print Drivers for the above selected printer
o FONTS (required for GRIP applications)
Font Size
Arial 8, 10, 11, 12, 14, 24
Courier 10, 12
Courier New 10
MS Sans Serif 8, 10, 12, 14, 15, 24
Small Fonts 8
Terminal 9, 14
Software:
o QEMM 7.03
O
O
Windows for Workgroups 3.11
DOS 6.2
Should the City so desire, MRC will assist the City in evaluating and procuring
the necessary computer equipment.
e
6.1
TIMING & DELIVERABLES
MRC shall commence providing the Core GRIP Services within 10 working days
following contract authorization (including the GRIP licensing agreement) with
the objective of meeting with the City within 90 working days, and each quarter
thereafter, to:
Dehver and install the initial and quarterly-updated GRIP Query System
Train authorized City staff in the use of the GRIP Query System (an easy-
to-follow user manual is also furnished by MRC)
Review and discuss the initial and quarterly-updated GRIP Digests
The preliminary workplan schedule on the follOwing page presents MRC's time
frames for accomplishment of the prescribed tasks. The GRIP Query System and
Digest are further described in Sections 6.1 and 6.2.
GRIP QUERY SYSTEM
Within 90 days after commencing the project, and each quarter thereafter, MRC
shall dehver and install the initial and quarterly-updated GRIP database on a
City-designated IBM compatible PC to allow onsite access by authorized City
staff. Should the City so desire, MRC shall furnish the necessary equipment and
peripherals at MRC's cost.
The GRIP Query System includes data for each of the City's major sources of
general fund revenue as follows:
All revenue information is integrated according to revenue generator
name and geographic location
Revenue contributions for individual and aggregate sources of revenue
are displayed for each revenue generator
Combined revenue information for multiple revenue generators is
presented in user-defined geographic areas
Since the. GRIP database contains information that is deemed confidential by
businesses, state agencies and the major utility companies, the GRIP data is
encrypted and the System is password-protected to ensure access by authorized
personnel only. (See Attachment C-1 for GRIP software licensing agreement.)
In addition to providing training for authorized staff, MRC will also provide
technical Support free of charge via telephone on an as-needed basis for up to 10
hours per quarter.
After the initial delivery and installation of the GRIP Query System, MRC shah
maintain, update and integrate the database on a quarterly basis for the duration
of the contract_ The accuracy and completeness of the GRIP database will
continually improve as a byproduct of MRC's ongoing Revenue Enhancement
Audit Program.
The updates shah include revenue generator, address and/or parcel number,
business category code, business identification number, historical payments and
the most current revenue data available.
MRC's GRIP Query System will enable City staff to analyze the contribution of
revenue (from individual or aggregated sources) by each revenue generator in
the City, on an individual, grouped or sorted order by business name, business
type, business identification number, size ranking, street address, assessor parcel
number, or specific user-defined geographic areas.
The GRIP Query System can also be used to geo-code additional user-defined
areas such as City Council Districts, business industrial parks, redevelopment
project areas, etc.
The GRIP Query System provides the City with a leading-edge analytical and
management information tool for a broad range of fiscal, economic and strategic
applications.
6.2
GRIP DIGEST
Upon delivery of the GRIP database , and each quarter thereafter, MRC shall
prepare and deliver to the City initial and quarterly-updated confidential and
non-confidential versions of the GRIP Digest.
Each issue of the GRIP Digest reflects MRC's monitoring and analysis of the
City's continually changing economic base and revenue structure, and
subsequent identification of revenue performance, trends, gains, declines,
projections, issues and opporttmities.
MRC's GRIP Digest will enable the City to answer questions such as:
How is the City's economic base performing in terms of revenue
generation?
What changes are occurring in the City's economic base and how will
those changes impact the City's revenue?
Where is the City's tax revenue coming from?
What trends, good or bad, are occurring to the City's general fund
revenue base?
Which businesses is the City most dependent on for its tax revenue?
Which business types are the. most economically desirable/undesirable?
How are specific geographic areas (mutually defined by City/MRC)
performing?
How will actual/potential changes to the City's revenue structure (legal
decisions, legislation, regulation, deregulation, technological change, etc.)
impact the City's revenue?
The scope of each GRIP Digest shall include, but not be limited, to:
Monitoring and analyzing the City's revenue, and most significant
revenue generators, based on the following:
Management Summary & Charts - GRIP Digest includes a
confidential and non-confidential Management Sum'mary with
supporting color charts that graphically portray revenue
composition and performance for the City.
Analysis Section- The Analysis Section of MRC's GRIP Digest
compares the revenue performance of the most significant revenue
generators for the latest complete quarter benchmark .year to the
same period in the prior year(s).
10
The Analysis Section includes the following: (1) historical
performance to be compiled'for up to four years; (2) an analysis of
the changes that occurred by business sector; and (5) an analysis by
magrdtude of change indicating which key businesses grew or
declined, measured in absolute dollars and percentages.
Note: Historical data will be shown as it is.compiled in preparing
future GRIP Digests. For example, the initial year will show no
historical data, and the second year will show One year's history
together with the current year.
General Fund Trend Report_ Data is summarized by type of
revenue in summary form in order to develop revenue trends
which are shown using successive benchmark years. Percentage of
revenue contributed is also shown by successive benchmark year to
indicate trends in revenue composition as well.
Top 100 Revenue Generators - Revenue generated by the City's top
100 Revenue Generators is shown in order of aggregate revenue,
including historical performance.
Top 20 Revenue Generators bv Revenue Source - This report shows
the 20 largest revenue generators within each revenue source.
11
7. OPTIONAL GRIP SERVICES
The scope of MRC's GRIP Services can be customized to fit the City's specific
needs by adding to the Core GRIP Services one or more of the Optional GRIP
Services briefly described below. The Optional GRIP Services can be added to
the Core GRIP Services from the outset or at any time during the term of the
contract_
FOCUSD ECONOMIC DEVELOPMENT STRATEGIES
By analyzing City-specific information derived from the GRIP database,
MRC can assist the City in developing and implementing focused
strategies for business retention, attraction, expansion, and cooperation.
PHYSICAL PREsENcE, FISCAL IMPACT & REVENUE PRODUCTIX/F~ ANALYSIS
By capturing and relating elements of Physical Presence to revenue
contribution, in size-adjusted equivalent units of measurement, MRC is
able to analyze the relative fiscal impact and revenue productivi.ty for
each revenue generator in the Ci .ty.
The need for this information becomes increasingly critical as each city
moves towards fiscal self-reliance and dependence on the revenue
generated from its own economic base to fund the City's general services.
Physical presence data (suchas number of employees, land/building size,
etc.) can be gathered by the City and/or MRC.
BUSINESS LICENSE STRATEGIC ANALYSIS
Each city is becoming increasingly dependent on its own economic base
and discretionary (ci .ty-imposed) taxes to fund general services. In doing
so, business license tax is emerging as a key element in balancing a city's
ability to fund general services and still be competitive with other cities in
retaining and attracting businesses. MRC's analysis of the existing
business license tax ordinance (and potential revisions thereof) will assist
the City in defining the strategic role of the ordinance in shaping the fiscal
and economic future of the City.
12
El
FISCAL, ECONOMIC & TAX MODELING
The GRIP database and computerized modeling capability enable MRC to
simulate the fiscal and economic impacts that various land uses,
developments, businesses and tax structures have on the City's residents,
businesses and the City itself. With this modeling capabili.ty, MRC can
rapidly simulate and analyze the impacts under numerous "what if"
scenarios based on criteria such as fairness, equity, self-reliance and
competitiveness with other cities.
STRATEGIES WORKSESSlONS & OTHER MEbTI~GS
By analyzing Ci .fy-specific information derived from the GRIP database,
MRC can assist the City by conducting interactiVe w°rksessions to
facilitate strategic decision-making based on:
0
0
o
Interrelatedness of City's economic base & revenue structure
Identification & analysis of City's fiscal and economic SWOTs'
Exploration, development & prioritization of feasible strategies to
improve the City's fiscal and economic stability
Consensus building
0
In addition to facilitating strategies worksessions, MRC is also available to
assist the Ci.ty on an as-needed basis by participating in presentations,
public' hearings or other types of meetings with members of City staff or
Council, the Chamber of Commerce, media, citizen advisory groups,
committees, etc.
INFORMATION DISPLAY MODULE
Ironically, the most important and dramatic use of mapping technology is
not for maps, but for database management; data extraction by
geographical area, mass updating of data, and presentation of information
graphically.
The extraction, analysis .and presentation of GRIP database information
can be'significantly enhanced by the visual display of GRIP Query System
output maps. MRC's GRIP Information Display Module, which is tied to
the GRIP Query System, allows Query System users to display
information output on a map depicting the City.
SPECIAL ANALYSIS AND .REPORTS
Given the many possibilities for the use of GRIP information, MRC can
assist the City in undertaking a variety of special analyses using GRIP
data alone or in conjunction with other data sources.
Strengths, Weaknesses, Opportunities, Threats
13
8. COMPENSATION
Efficiencies and savings are gained by MRC from the common tasks'
accomplished and data developed in providing the GRIP service in conjunction
with REAP. Accordingly, MRC's compensation (including expense
reimbursement) for implementing the Core GRIP service in conjunction with
REAP is $16,000. The fee includes:
Development and integration of the database
Licensing, dehvery and installation of the GRIP Query System
Training authorized staff in the use of the GRIP Query System
Furnishing an easy-to-use user manual
Preparing and dehvering the initial GRJ~P Digest
Thereafter, maximizing the efficiencies and savings gained from the common
tasks accomplished and data developed in providing the GRIP service in
R ' '
conjunction with EAP, MRC s compensation (including expense
reimbursement) shall be .$1,000 per month, for as long as MRC continues to
provide Core GRIP services to the City, which include:
Continuous maintenance, updating and integration of the database and
software support
[] Delivery and installation of the quarterly updated GRIP Query, System
Training authorized staff (as needed) in the use of the Query System and
user manual
Preparing and delivering the quarterly updated GRIP Digests
MRC's compensation for providing the 'initial and ongoing GRIP service is
payable after the City has received the services being invoiced and has sufficient
funds to cover the charges from a combination of accrued Audit Efficiency
Credits (see Exhibit B, Section 5.1) and the City's share of new revenue produced
from MRC's revenue enhancement audits.
Invoicing and payment for providing the GRIP service is thus deferred until
there is adequate revenue from a combination of MRC's Revenue Enhancement
Audit Program and/or Audit Efficiency Credits to cover iL
14
8.2 OPTIONAl/ADDITIONAL GRIP SERVICES
Should the City desire optional/additional GRIP services, such as those
described above, MRC will only charge an additional fee ff the City and MRC so
agree in advance~
The data elements required for the GRIP service are typically provided in a
computer accessible format. Should we encounter a situation where this is not
the case and the City decides to have MRC assume responsibility for conversion
of data into a computer accessible format, MRC will only charge the City for
actual cost reimbursement_
In the event the City requires these or other optional/additional services that
require an additional charge, MRC shall provide the City with a not-to-exceed
budget in advance.
MRC's compensation/cost reimbursement for the optional/additional services is
also eligible for the self-funding program as previously described.
15
Attachment C-1
LICENSING AGREEMENT
for
GEOBASED REVENUE INFORMATION PROGRAM
This Agreement is made at Tustin, California, as of 1996, by and
between the City of Tustin, a municipal corporation (hereafter referred to as "City")
and Municipal Resource Consultants (hereafter referred to as "MRC"), who agree as
follows:
1. License. Subject to the terms and conditions set forth in this Agreement,
MRC shah provide to the City, a hcense to use MRC's software, database and other
property (hereafter referred to as "Property") as further described in Exhibit "C". MRC
shall provide said Property at the lime, place, and in the manner specified in Exhibit
"C". MRC shall not be compensated for property outside the scope of Exhibit "C".
2. Restrictions. Said Property shall only be used by the City. The City shall
not sublet, duplicate or modify said Property. Said Property may only be used for the
purposes described in Exhibit "C". Said Property shall be returned to MRC at the time
the license expires. MRC may terminate the license, at its sole option, if City violates
any of the. stated restrictions. The Property, remains the sole and exclusive property of
MRC.
The license granted hereunder shall not imply ownership by City of said
Property, rights of City to sell said Property or rights to use said Property for the
benefits of others. This license is transferable only with MRC's written consent.
3. Payment. City shall pay MRC f~r license rendered pursuant to this
Agreement at the times and in the manner set forth in Exhibit "C". The payments
specified in Exhibit "C" shall be the only payments to be made to MRC for license
rendered pursuant to this agreement, unless the Ci,ty approves additional
compensation for additional property. MRC shah submit all billings for license
rendered pursuant to this Agreement to City in the manner specified in Exhibit "C'.
4. Exhibits. All Exhibits referred to herein are attached hereto and are by
this reference incorporated herein.
5. Proprietary Information. As used herein, the term "proprietary
information", means any information which relates to internal controls, computer or
data processing programs, data that has been modified by MRC proprietary techniques
resulting in standardized, specifically correlated or integrated information, electronic
data processing applications, routines, subroutines, techniques or systems, or business
affairs and methods of operation or proposed methods of operation of MRC except
such information which is not obtained through this Agreement or which is in the
public domain at the time of its disclosure to the other party. City shah hold in
confidence using levels of effort consistent with its own policies applicable to its
confidential information and shah not disclose to any other party any MRC proprietary
information (as such term is herein defined) which may be disclosed to City by MRC in
connection with this Agreement or otherwise learned or obtained by City in connection
with this Agreement The parties further agree not to take any other action inconsistent
with the confidential nature of MRC proprietary, information. The obligations imposed
by this Paragraph shall survive any expiration or termination of this Agreement.
6. Waiver. No waiver of any breach or failure or delay in exercising any
right, power or remedy shah constitute a waiver of same or of any provision hereof and
no waiver shah be effective unless in writing and signed by an authorized
representative of the party against whom enforcement of such waiver is sought.
7. Severabilitv. The provisions of this Agreement are severable and the
unenforceability of any provision of this Agreement shah not affect the enforceability of
this Agreement or any other provision hereof. In addition, in the event that any
provision of this Agreement is determined by a court to be unenforceable as drafted,
the parties acknowledge that it is their intention that such provision be construed in a
manner designed to effectuate the purposes of such provision to the fullest extent
enforceable under applicable law.
8. Taxes. Ci.ty shall be responsible for the payment of any applicable taxes
in connection with the Agreement, except for any tax based on MRC's net income.
9. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California. Any controversy or claim arising
out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration
in accordance with the Commercial Arbitration Rules 'of the American Arbitration
Association, and judgment upon the award rendered by the Arbitrator(s) may be
entered in any court having jurisdiction hereof.
10. Remedies Cumulative. All remedies in this Agreement are cumulative
and in addition to and not in lieu of, any other remedies a party may have at law or in
equity.
11. Entire Agreement. This Agreement and the Exhibits hereto, which is
hereby incorporated herein by reference, shall constitute the entire agreement between
City and MRC with respect to its subject'matter, shall supersede all prior agreements
and understandings, ff any, between the parties respecting the subject matter hereof
and may be modified only by written agreement of the parties.
EXECUTED as of the day and year first above stated.
CITY OF TUSTIN
By:
Title:
Date:
MUNICIPAL RESOURCE CONSULTANTS
PART~E~c.
By: ~
/ President
· November 20, 1996