AGENDA ITEM NO. 8.5
CITY OF ELK GROVE
CITY COUNCIL STAFF REPORT
AGENDA TITLE:
Adopt resolution dispensing with the
formal request for proposal procedures
pursuant to Elk Grove Municipal Code
Section 3.42.140(B)(3) and authorizing the
City Manager to execute a contract
amendment to contract C-12-323 with
MuniServices, LLC for Audit of Utility User
Tax Revenues, extending the contract for
five years and authorizing an additional
expenditure
of
funds
not-to-exceed
$150,000 [for a total expenditure of funds
over the term of the contract not-to-exceed
$300,000]
MEETING DATE:
June 14, 2017
PREPARED BY:
Joe Simone, Purchasing and Contracts
Manager
DEPARTMENT HEAD:
Brad Koehn, Director of Finance and
Administrative Services
RECOMMENDED ACTION:
Staff recommends that the City Council adopt a resolution dispensing with
formal request for proposal procedures pursuant to Elk Grove Municipal
Code Section 3.42.140(B)(3) and authorizing the City Manager to execute
a contract amendment to contract C-12-323 with MuniServices, LLC for
Audit of Utility User Tax Revenues, extending the contract for five years
and authorizing an additional expenditure of funds not-to-exceed $150,000
[for a total expenditure of funds over the term of the contract not-to-exceed
$300,000].
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Elk Grove City Council
June 14, 2017
Page 2 of 3
BACKGROUND INFORMATION:
Upon incorporation, the City of Elk Grove adopted the County of
Sacramento’s existing Utility User Tax (UUT), which levied a 2.50% tax on
gas, electric, communications and sewer usages. On May 26, 2010, the
City Council introduced an Ordinance amending Chapter 3.40 of the Elk
Grove Municipal Code to modernize the language to reflect technological
advances and reduce the tax rate from 2.50% to 2.25%. In accordance with
Proposition 218, voter approval was required. A majority of voters approved
the proposed revisions to the UUT on November 2, 2010 (Measure J) and
Ordinance No. 14-2010 was adopted by the City Council on December 8,
2010.
Section 3.40.240 of the Elk Grove Municipal Code now states: “The City
shall annually verify that the taxes owed under this chapter have been
properly applied, exempted, collected, and remitted in accordance with this
chapter, and properly expended according to applicable municipal law. The
annual verification shall be performed by a qualified independent third party
and the review shall employ reasonable, cost effective steps to assure
compliance, including the use of sampling audits.”
MuniServices provides UUT audit services for over 60 public agencies in
California, representing approximately 70% of all UUT revenues collected
in the state. With over 25 years’ experience, MuniServices has developed
extensive data management resources that facilitate finding new revenue
sources for clients. MuniServices also offers a dedicated Government
Relations team to provide policy, regulatory and legislative consulting
support.
Over the last five years, MuniServices, LLC (Muni) has gained extensive
organizational knowledge of the City and consistently demonstrates a high
level of professionalism and competence in this specialized field.
Therefore, staff requests that the City Council find that compliance with
formal request for proposal procedures for these services is not in the best
interests of the City and dispense with the formal request for proposal
procedures pursuant to Elk Grove Municipal Code Section 3.42.140(B)(3),
and further authorize a renewal of the current contract with MuniServices,
LLC as described in this report.
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Elk Grove City Council
June 14, 2017
Page 3 of 3
FISCAL IMPACT:
Utility User Tax is a vital source of revenue to the General Fund and should
be closely monitored.
The cost for each year will be a maximum of 0.6% of the total Utility User
Tax revenue for gas, electric, telecommunications, and video usages from
the prior fiscal year.
Additional revenue resulting from the audit process will add to the General
Fund and will offset the cost of the contract in whole or part. The proposed
Fiscal Year 2017-18 Budget includes funding for the first year’s fee; the
remaining amount will be included in subsequent budgets presented to the
Council for approval.
ATTACHMENTS:
1. Resolution
2. Contract
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ATTACHMENT 1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ELK GROVE
DISPENSING WITH THE FORMAL REQUEST FOR PROPOSAL PROCEDURES
PURSUANT TO ELK GROVE MUNICIPAL CODE SECTION 3.42.140(B)(3)
AND AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT
AMENDMENT TO CONTRACT C-12-323 WITH MUNISERVICES, LLC FOR
AUDIT OF UTILITY USER TAX REVENUES, EXTENDING THE CONTRACT
FOR FIVE YEARS AND AUTHORIZING AN ADDITIONAL EXPENDITURE OF
FUNDS NOT-TO-EXCEED $150,000 [FOR A TOTAL EXPENDITURE OF
FUNDS OVER THE TERM OF THE CONTRACT NOT-TO-EXCEED $300,000]
WHEREAS, Utility User Tax (UUT) is a vital source of revenue to the General
Fund; and
WHEREAS, the City Council adopted Ordinance No. 14-2010 on December 8,
2010, which states that an annual verification of Utility User Tax shall be performed by
an independent third party; and
WHEREAS, MuniServices, LLC provides Utility User Tax audit services for over
60 public agencies in California, representing over 70% of all UUT revenue collected in
the state; and
WHEREAS, MuniServices, LLC (Muni) has gained extensive organizational
knowledge of the City and consistently demonstrates a high level of professionalism and
competence in this specialized field.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Elk
Grove, having determined that a request for proposals (“RFP”) process for securing the
Utility User Tax audit services is not in the best interests of the City, hereby dispenses
with the formal request for proposal procedures pursuant to Elk Grove Municipal Code
3.42.140(B)(3), and
BE IT FURTHER RESOLVED that the City Council of the City of Elk Grove
hereby authorizes the City Manager to execute a contract amendment with
MuniServices, LLC for utility tax compliance and revenue protection services for a term
of five years and authorizing an expenditure of funds not to exceed $150,000 [for a total
expenditure of funds over the term of the contract not-to-exceed $300,000].
PASSED AND ADOPTED by the City Council of the City of Elk Grove this 14th
day of June, 2017
STEVE LY, MAYOR of the
CITY OF ELK GROVE
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ATTEST:
APPROVED AS TO FORM:
JASON LINDGREN, CITY CLERK
JONATHAN P. HOBBS,
CITY ATTORNEY
ATTACHMENT 2
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